Performance Bonuses in the Public Sector: Winner-Take-All Prizes Versus Proportional Payments to Reduce Child Malnutrition in India

34 Pages Posted: 31 Oct 2018

See all articles by Prakarsh Singh

Prakarsh Singh

Amherst College - Department of Economics

William A. Masters

Tufts University - Friedman School of Nutrition Science and Policy; Tufts University - Department of Economics

Date Written: October 7, 2018

Abstract

We conduct a randomized trial to compare incentives for improved child outcomes among salaried caregivers in Chandigarh, India. A winner-take-all prize paid to the best performer yielded less improvement than dividing the same award among workers in proportion to their share of measured gains. In our population of about 2,000 children served by 85 workers, using proportional rewards led to weight-for-age malnutrition rates that were 4.3 percentage points lower at 3 months (when rewards were paid) and 5.9 points lower at 6 months (after the contest had ended), with mean weight-for-age z scores that were .071 higher at 3 months, and .095 higher at 6 months. Proportional bonuses led to larger and more sustained gains because of better performance by lower-ranked workers, whose efforts were not rewarded by a winner-take-all prize. Results are consistent with previous laboratory trials and athletic events, demonstrating the value of proportional rewards to improve development outcomes.

Keywords: contest design, performance pay, malnutrition, underweight, child development

JEL Classification: O1, I1, M5

Suggested Citation

Singh, Prakarsh and Masters, William A., Performance Bonuses in the Public Sector: Winner-Take-All Prizes Versus Proportional Payments to Reduce Child Malnutrition in India (October 7, 2018). Journal of Development Economics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3263008 or http://dx.doi.org/10.2139/ssrn.3263008

Prakarsh Singh

Amherst College - Department of Economics ( email )

P.O. Box 5000
Amherst, MA 01002-5000
United States
413-542-2271 (Phone)

William A. Masters (Contact Author)

Tufts University - Friedman School of Nutrition Science and Policy ( email )

150 Harrison Avenue
Boston, MA 02111
United States

HOME PAGE: http://sites.tufts.edu/willmasters

Tufts University - Department of Economics ( email )

Medford, MA 02155
United States

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