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Choice over Payment Schemes and Worker Effort

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  • Abel, Martin

    (Bowdoin College)

  • Burger, Rulof

    (Stellenbosch University)

Abstract

We study the effect of monetary incentives on effort in a prosocial task: writing letters encouraging voter turnout. Volunteers are randomized to receive no incentive, unconditional upfront payment, payment conditional on completing the task, or to have a choice between the two payment schemes. The unconditional and conditional payment both increase task completion rates by about 18 percentage points (43%). Giving people a choice between the payment scheme doubles the effect on task completion (35 p.p., 84%). Unlike unconditional payments, a choice over contracts also increases time spent on the task and letter quality. Survey responses suggest that giving people a choice is effective because it increases task ownership rather than the desire to return a favor or avoid feelings of guilt.

Suggested Citation

  • Abel, Martin & Burger, Rulof, 2022. "Choice over Payment Schemes and Worker Effort," IZA Discussion Papers 15769, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15769
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    More about this item

    Keywords

    self determination; gift exchange; guilt aversion; labor supply;
    All these keywords.

    JEL classification:

    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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