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Performance Pay and Workplace Injury: Panel Evidence
Author(s) -
Artz Benjamin,
Heywood John S.
Publication year - 2015
Publication title -
economica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.532
H-Index - 65
eISSN - 1468-0335
pISSN - 0013-0427
DOI - 10.1111/ecca.12153
Subject(s) - panel data , proxy (statistics) , fixed effects model , sorting , survey data collection , panel survey , blue collar , economics , severance , demographic economics , labour economics , econometrics , computer science , statistics , mathematics , programming language
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.