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Performance Pay and Workplace Injury: Panel Evidence

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  • Benjamin Artz
  • John S. Heywood

Abstract

type="main" xml:id="ecca12153-abs-0001"> Using panel survey data, we show cross-sectional evidence of an elevated risk of workplace injury for those paid piece rates and bonuses. While consistent with Adam Smith's behavioural conjecture, this could simply reflect sorting across workers or firms. In response we successively control for a risk proxy, for worker fixed effects and for worker with employer match fixed effects. No previous examination has controlled for such fixed effects or examined US survey data. The estimates indicate that injury risk increases substantially when blue-collar (manual) workers become paid by piece rates and bonuses.

Suggested Citation

  • Benjamin Artz & John S. Heywood, 2015. "Performance Pay and Workplace Injury: Panel Evidence," Economica, London School of Economics and Political Science, vol. 82, pages 1241-1260, December.
    • Handle: RePEc:bla:econom:v:82:y:2015:i::p:1241-1260
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    File URL: http://hdl.handle.net/10.1111/ecca.2015.82.issue-s1
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    Citations

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    Cited by:

    1. Uwe Jirjahn & Jens Mohrenweiser, 2019. "Performance Pay and Applicant Screening," British Journal of Industrial Relations, London School of Economics, vol. 57(3), pages 540-575, September.
    2. Hasebe, Takuya & Sakai, Tadashi, 2018. "Are elderly workers more likely to die in occupational accidents? Evidence from both industry-aggregated data and administrative individual-level data in Japan," Japan and the World Economy, Elsevier, vol. 48(C), pages 79-89.
    3. Mehrzad B. Baktash & John S. Heywood & Uwe Jirjahn, 2022. "Performance pay and alcohol use in Germany," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 61(4), pages 353-383, October.
    4. Green, Colin P. & Heywood, John S., 2023. "Performance pay, work hours and employee health in the UK," Labour Economics, Elsevier, vol. 84(C).
    5. Allan, Julia L. & Andelic, Nicole & Bender, Keith A. & Powell, Daniel & Stoffel, Sandro & Theodossiou, Ioannis, 2021. "Employment contracts and stress: Experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 187(C), pages 360-373.
    6. Quinlan, Michael., 2015. "The effects of non-standard forms of employment on worker health and safety," ILO Working Papers 994894053402676, International Labour Organization.
    7. Boal, William M., 2018. "Work intensity and worker safety in early twentieth-century coal mining," Explorations in Economic History, Elsevier, vol. 70(C), pages 132-149.
    8. Thomas, Robert D. & Davis, John W. & Cuccaro, Paula M. & Gemeinhardt, Gretchen L., 2022. "Assessing associations between insecure income and US workers’ health: An IPUMS-MEPS analysis," Social Science & Medicine, Elsevier, vol. 309(C).
    9. Myeong-Hun Lim & Jin-Ha Yoon & Won-Tae Lee & Min-Seok Kim & Seong-Uk Baek & Jong-Uk Won, 2023. "Performance-Based Pay System and Job Stress Related to Depression/Anxiety in Korea: Analysis of Korea Working Condition Survey," IJERPH, MDPI, vol. 20(5), pages 1-13, February.
    10. Benjamin Artz & Colin P. Green & John S. Heywood, 2021. "Does performance pay increase alcohol and drug use?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 34(3), pages 969-1002, July.
    11. Baktash, Mehrzad B. & Heywood, John S. & Jirjahn, Uwe, 2022. "Worker stress and performance pay: German survey evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 201(C), pages 276-291.
    12. Cecilia Navarra & Ermanno Tortia, 2014. "Employer Moral Hazard, Wage Rigidity, and Worker Cooperatives: A Theoretical Appraisal," Journal of Economic Issues, Taylor & Francis Journals, vol. 48(3), pages 707-726.
    13. Nicole Andelic & Julia Allan & Keith A. Bender & Daniel Powell & Ioannis Theodossiou, 2024. "Performance‐related pay, mental and physiological health," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 63(1), pages 3-25, January.
    14. Michael H Belzer, 2018. "Work-stress factors associated with truck crashes: An exploratory analysis," The Economic and Labour Relations Review, , vol. 29(3), pages 289-307, September.
    15. Karsten Albæk & Tine Jeppesen & Bjørn Christian Arleth Viinholt, 2022. "PROTOCOL: Performance pay and employee health: A systematic review," Campbell Systematic Reviews, John Wiley & Sons, vol. 18(3), September.
    16. Marco Clemens, 2024. "Bonuses, Profit-sharing and Job Satisfaction: the More, the Better?," IAAEU Discussion Papers 202406, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    17. Artz, Benjamin & Heywood, John S., 2020. "Unions, Worker Participation and Worker Well-Being," GLO Discussion Paper Series 705, Global Labor Organization (GLO).
    18. Green, Colin P. & Heywood, John S., 2022. "Does Performance Pay Influence Hours of Work?," IZA Discussion Papers 15474, Institute of Labor Economics (IZA).

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