Performance related pay, productivity and wages in Italy: a quantile regression approach

Mirella Damiani, Fabrizio Pompei and Andrea Ricci

MPRA Paper from University Library of Munich, Germany

Abstract: The authors analyzed the role of Performance Related Pay (PRP) in a sample of Italian manufacturing and service firms and presented standard quantile estimates to investigate heterogeneity in pay-performance impacts on labor productivity and wages. In a second stage, the endogeneity of PRP was taken into account by using instrumental variable quantile regression techniques. They find considerable heterogeneity across the distribution of labor productivity and wages, with the highest role of PRP obtained at the lowest and highest quantiles. However, for all quantiles, the comparison of productivity and wage estimates suggests that PRP might not only be rent-sharing devices, but also incentive schemes that substantially lead to efficiency enhancements. These findings are confirmed for firms under union governance and suggest that well designed policies, that circumvent the limited implementation of PRP practices, would guarantee productivity improvement.

Keywords: Efficiency; Wages; Performance–related pay; unions (search for similar items in EconPapers)
JEL-codes: D24 J31 J33 J51 (search for similar items in EconPapers)
Date: 2014-01-30
New Economics Papers: this item is included in nep-eff, nep-hrm, nep-lab and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Performance related pay, productivity and wages in Italy: a quantile regression approach (2016)
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