Piece Rates and Workplace Injury: Does Survey Evidence Support Adam Smith?
30 Pages Posted: 1 Jul 2010
Date Written: May 29, 2010
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: Suggested Citation