Does Performance Pay Increase the Risk of Worker Loneliness?

Mehrzad B. Baktash

Kyklos, 2026, vol. 79, issue 1, 129-148

Abstract: Increased wages and productivity associated with performance pay can be beneficial to both employers and employees. However, performance pay can also entail unintended consequences for workers' well‐being. This study is the first to systematically examine the association between performance pay and loneliness, a significant policy‐relevant social well‐being concern. Using representative survey data from Germany, I show that performance pay is significantly associated with increased loneliness. Correspondingly, performance pay is negatively associated with the social life satisfaction of workers. Investigating the transmission channels reveals work hours, earnings, conflict with coworkers, and conflict with the life partner as important mediators. The key findings also hold in sensible instrumental variable estimations, addressing the potential endogeneity of performance pay and in various robustness checks. Finally, implications are discussed.

Date: 2026
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1111/kykl.70018

Related works:
Working Paper: Does Performance Pay Increase the Risk of Worker Loneliness? (2024)
Working Paper: Does Performance Pay Increase the Risk of Worker Loneliness? (2024)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:kyklos:v:79:y:2026:i:1:p:129-148

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0023-5962

Access Statistics for this article

Kyklos is currently edited by Rene L. Frey

More articles in Kyklos from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().