Performance Pay and Wage Inequality

Thomas Lemieux, W. Bentley Macleod () and Daniel Parent ()

No 13128, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We document that an increasing fraction of jobs in the U.S. labor market explicitly pay workers for their performance using bonuses, commissions, or piece-rates. We find that compensation in performance-pay jobs is more closely tied to both observed (by the econometrician) and unobserved productive characteristics of workers. Moreover, the growing incidence of performance-pay can explain 24 percent of the growth in the variance of male wages between the late 1970s and the early 1990s, and accounts for nearly all of the top-end growth in wage dispersion(above the 80th percentile).

JEL-codes: J31 J33 (search for similar items in EconPapers)
Date: 2007-05
New Economics Papers: this item is included in nep-bec and nep-lab
Note: LS
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Citations: View citations in EconPapers (34)

Published as Thomas Lemieux & W. Bentley MacLeod & Daniel Parent, 2009. "Performance Pay and Wage Inequality-super-," The Quarterly Journal of Economics, MIT Press, vol. 124(1), pages 1-49, February.

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Related works:
Journal Article: Performance Pay and Wage Inequality (2009)
Working Paper: Performance Pay and Wage Inequality (2007)
Working Paper: PERFORMANCE PAY AND WAGE INEQUALITY (2006)
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