Performance Pay and Workplace Injury: Panel Evidence

20 Pages Posted: 18 Jan 2016

See all articles by Benjamin Artz

Benjamin Artz

University of Wisconsin - Oshkosh - College of Business

John S. Heywood

University of Wisconsin at Milwaukee

Date Written: December 2015

Abstract

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.

Suggested Citation

Artz, Benjamin and Heywood, John S., Performance Pay and Workplace Injury: Panel Evidence (December 2015). Economica, Vol. 82, pp. 1241-1260, 2015, Available at SSRN: https://ssrn.com/abstract=2716499 or http://dx.doi.org/10.1111/ecca.12153

Benjamin Artz (Contact Author)

University of Wisconsin - Oshkosh - College of Business ( email )

United States

John S. Heywood

University of Wisconsin at Milwaukee ( email )

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Milwaukee, WI 53211
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