Performance pay and alcohol use in Germany

Mehrzad B. Baktash, John Heywood and Uwe Jirjahn

Industrial Relations: A Journal of Economy and Society, 2022, vol. 61, issue 4, 353-383

Abstract: Previous studies show that performance pay can benefit firms and workers by increasing productivity and wages. Yet, performance pay can also have unintended consequences for worker health. Using data from the German Socio‐Economic Panel, we examine the hypothesis that alcohol use as “self‐medication” is a natural response to the stress and uncertainty associated with performance pay. We find that the likelihood of consuming each of four types of alcohol (beer, wine, spirits, and mixed drinks) is higher for those receiving performance pay even controlling for a long list of economic, social, and personality characteristics and in sensible instrumental variable estimates. We also show that the number of types of alcohol consumed is larger for those receiving performance pay and that the intensity of consumption increases.

Date: 2022
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Citations: View citations in EconPapers (11)

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https://doi.org/10.1111/irel.12301

Related works:
Working Paper: Performance Pay and Alcohol Use in Germany (2021)
Working Paper: Performance Pay and Alcohol Use in Germany (2021)
Working Paper: Performance Pay and Alcohol Use in Germany (2021)
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