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Performance pay, work hours and employee health in the UK

Author

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  • Green, Colin P.
  • Heywood, John S.

Abstract

A large body of research links performance pay to poorer worker health. The mechanism generating this link remains in doubt. We examine a common suspect, that performance pay causes employees to work longer hours in pursuit of higher pay. Using UK data, we demonstrate that performance pay is associated with more work hours and a higher probability of working long hours. Yet approximately two thirds of these differences reflect worker sorting rather than behavioral change. The remaining effects are small except those for labourers. Indeed, controlling for hours of work does not diminish the link between worse self-reported health and performance pay.

Suggested Citation

  • Green, Colin P. & Heywood, John S., 2023. "Performance pay, work hours and employee health in the UK," Labour Economics, Elsevier, vol. 84(C).
    • Handle: RePEc:eee:labeco:v:84:y:2023:i:c:s0927537123000623
    DOI: 10.1016/j.labeco.2023.102387
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    References listed on IDEAS

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    Cited by:

    1. Clemens, Marco & Sauermann, Jan, 2024. "Making the Right Call: The Heterogeneous Effects of Individual Performance Pay on Productivity," IZA Discussion Papers 17119, Institute of Labor Economics (IZA).
    2. Jirjahn, Uwe & Rienzo, Cinzia, 2024. "Working from Home and Performance Pay: Individual or Collective Payment Schemes?," IZA Discussion Papers 17234, Institute of Labor Economics (IZA).
    3. Natália P. Monteiro & Odd Rune Straume, 2024. "Management Practices, Pay, and Pay Inequality," Journal of Labor Research, Springer, vol. 45(2), pages 254-304, June.
    4. Mehrzad B. Baktash & John S. Heywood & Uwe Jirjahn, 2024. "Variable Pay and Work Hours: Does Performance Pay Reduce the Gender Time Gap?," Research Papers in Economics 2024-08, University of Trier, Department of Economics.
    5. Baktash, Mehrzad B., 2024. "Does Performance Pay Increase the Risk of Worker Loneliness?," GLO Discussion Paper Series 1524, Global Labor Organization (GLO).

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    More about this item

    Keywords

    Performance related pay; Working hours;

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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