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Piece Rates and Workplace Injury: Does Survey Evidence Support Adam Smith?

While piece rates are routinely associated with greater productivity and higher wages, they may also generate unanticipated effects. This paper uses cross-country European data to provide among the first broad survey evidence of a strong link between piece rates and workplace injury. Despite unusually good controls for workplace hazards, job characteristics and worker effort, workers on piece rates suffer a large 5 percentage point greater likelihood of injury. As injury rates are typically not controlled for when estimating the premium to piece rates, this raises the specter that a portion of the return to piece rates reflects a compensating wage differential for risk of injury.

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File URL: http://www.lancaster.ac.uk/media/lancaster-university/content-assets/documents/lums/economics/working-papers/WorkplaceInjury.pdf
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Paper provided by Lancaster University Management School, Economics Department in its series Working Papers with number 609288.

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Date of creation: 2010
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Handle: RePEc:lan:wpaper:609288
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