Is a Higher Calling Enough? Incentive Compensation in the Church
Jay C. Hartzell
University of Texas at Austin - Department of Finance
Christopher A. Parsons
University of California, San Diego (UCSD) - Rady School of Management
New York University (NYU) - Stern School of Business
February 8, 2010
Journal of Labor Economics, Forthcoming
We study the compensation and productivity of more than 2,000 Methodist ministers in a 43-year panel data set. The church appears to use pay-for-performance incentives for its clergy, as their compensation follows a sharing rule by which pastors receive approximately 3% of the incremental revenue from membership increases. Ministers receive the strongest rewards for attracting new parishioners who switch from other congregations within their denomination. Monetary incentives are weaker in settings where ministers have less control over their measured performance.
Number of Pages in PDF File: 40
Keywords: Compensation, Incentives, Churches, Religion
JEL Classification: G30, J30, J33, J45
Date posted: November 19, 2008 ; Last revised: February 28, 2010
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