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Do Salaries Improve Worker Performance?

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  • A Bryson
  • B Buraimo
  • R Simmons

Abstract

We establish the effects of salaries on worker performance by exploiting a natural experiment in which some workers in a particular occupation (football referees) switch from short-term contracts to salaried contracts. Worker performance improves among those who move onto salaried contracts relative to those who do not. The finding is robust to the introduction of worker fixed effects indicating that it is not driven by better workers being awarded salary contracts. Nor is it sensitive to workers sorting into or out of the profession. Improved performance could arise from the additional effort workers exert due to career concerns, the higher income associated with career contracts (an efficiency wage effect) or improvements in worker quality arising from off-the-job training which accompanies the salaried contracts.

Suggested Citation

  • A Bryson & B Buraimo & R Simmons, 2010. "Do Salaries Improve Worker Performance?," Working Papers 611478, Lancaster University Management School, Economics Department.
  • Handle: RePEc:lan:wpaper:611478
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Peter Dawson, 2014. "Refereeing and infringement of the rules," Chapters,in: Handbook on the Economics of Professional Football, chapter 24, pages 401-418 Edward Elgar Publishing.
    2. Christian Deutscher & Eugen Dimant & Brad R. Humphreys, 2017. "Match Fixing and Sports Betting in Football: Empirical Evidence from the German Bundesliga," Working Papers 17-01, Department of Economics, West Virginia University.
    3. Besters, Lucas, 2018. "Economics of professional football," Other publications TiSEM d9e6b9b7-a17b-4665-9cca-1, Tilburg University, School of Economics and Management.
    4. Derek Lanoue, 2015. "Does it pay to win the Stanley Cup?," Working Papers 1502, University of Windsor, Department of Economics.

    More about this item

    Keywords

    incentives; salaries; productivity; sports;

    JEL classification:

    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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