Piece Rates and Workplace Injury: Does Survey Evidence Support Adam Smith?

30 Pages Posted: 1 Jul 2010

See all articles by Keith A. Bender

Keith A. Bender

University of Aberdeen - Business School

Colin P. Green

Department of Economics

John S. Heywood

University of Wisconsin at Milwaukee

Date Written: May 29, 2010

Abstract

While piece rates are routinely associated with greater productivity and higher wages, they may also generate unanticipated effects. This paper uses cross-country European data to provide among the first broad survey evidence of a strong link between piece rates and workplace injury. Despite unusually good controls for workplace hazards, job characteristics and worker effort, workers on piece rates suffer a large 5 percentage point greater likelihood of injury. As injury rates are typically not controlled for when estimating the premium to piece rates, this raises the specter that a portion of the return to piece rates reflects a compensating wage differential for risk of injury.

Keywords: Piece Rates, Injury

JEL Classification: J28, J33

Suggested Citation

Bender, Keith A. and Green, Colin P. and Heywood, John S., Piece Rates and Workplace Injury: Does Survey Evidence Support Adam Smith? (May 29, 2010). Available at SSRN: https://ssrn.com/abstract=1632260 or http://dx.doi.org/10.2139/ssrn.1632260

Keith A. Bender

University of Aberdeen - Business School ( email )

Edward Wright Building
Dunbar Street
Aberdeen, Scotland AB24 3QY
United Kingdom

Colin P. Green (Contact Author)

Department of Economics ( email )

Høgskoleringen
Trondheim NO-7491, 7491
Norway

John S. Heywood

University of Wisconsin at Milwaukee ( email )

3210 N. Maryland Avenue, Bolton Hall 802
Bolton Hall 802
Milwaukee, WI 53211
United States
414-229-4437 (Phone)
414-229-3860 (Fax)

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