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Piece Rates, Fixed Wages, and Incentive Effects: Statistical Evidence from Payroll Records

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  • Paarsch, Harry J.
  • Shearer, Bruce

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Abstract

We estimate the gain in productivity that is realized by paying workers piece rates rather than fixed wages; i.e., the incentive effect.
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Suggested Citation

  • Paarsch, Harry J. & Shearer, Bruce, 1996. "Piece Rates, Fixed Wages, and Incentive Effects: Statistical Evidence from Payroll Records," Cahiers de recherche 9623, Université Laval - Département d'économique.
  • Handle: RePEc:lvl:laeccr:9623
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    References listed on IDEAS

    as
    1. Jones, Derek C & Kato, Takao, 1995. "The Productivity Effects of Employee Stock-Ownership Plans and Bonuses: Evidence from Japanese Panel Data," American Economic Review, American Economic Association, vol. 85(3), pages 391-414, June.
    2. Grossman, Sanford J & Hart, Oliver D, 1983. "An Analysis of the Principal-Agent Problem," Econometrica, Econometric Society, vol. 51(1), pages 7-45, January.
    3. Holmstrom, Bengt & Milgrom, Paul, 1987. "Aggregation and Linearity in the Provision of Intertemporal Incentives," Econometrica, Econometric Society, vol. 55(2), pages 303-328, March.
    4. Christopher Ferrall & Bruce Shearer, 1994. "Incentives, Team Production, Transaction Costs, And The Optimal Contract: Estimates Of An Agency Model Using Payroll Records," Working Paper 908, Economics Department, Queen's University.
    5. Oliver Hart & Bengt Holmstrom, 1986. "The Theory of Contracts," Working papers 418, Massachusetts Institute of Technology (MIT), Department of Economics.
    6. Lazear, Edward P, 1986. "Salaries and Piece Rates," The Journal of Business, University of Chicago Press, vol. 59(3), pages 405-431, July.
    7. Edward P. Lazear, 2000. "Performance Pay and Productivity," American Economic Review, American Economic Association, vol. 90(5), pages 1346-1361, December.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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