Pay Spread and Skewness. Employee Effort and Firm Productivity

P. Bingley and Tor Eriksson ()

Working Papers from Aarhus School of Business - Department of Economics

Abstract: We test predictions from theories of tournament, fairness and tastes for skewness about the effects of pay spread and skewness on employee effort and firm productivity. The data come from the population of 6,501 medium-to-large sized Danish private sector firms matched with all their employees during 1992-95. Potential simultaneity problems are addressed by instrumental variables provided by institutional variation in the income tax system.

Keywords: PRODUCTIVITY; INCOME TAX; TAX SYSTEMS (search for similar items in EconPapers)
JEL-codes: J31 J41 (search for similar items in EconPapers)
Date: Written 2001
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