Performance bonuses in the public sector: Winner-take-all prizes versus proportional payments to reduce child malnutrition in India

Prakarsh Singh and William Masters

Journal of Development Economics, 2020, vol. 146, issue C

Abstract: We conduct a randomized trial to compare incentives for improved child outcomes among salaried caregivers in Chandigarh, India. A contest whose prize is divided among workers in proportion to measured gains yielded more improvement than a winner-take-all program. In our population of about 2000 children served by 85 workers, using proportional rewards led to weight-for-age malnutrition rates that were 4.3 percentage points lower at 3 months (when rewards were paid) and 5.9 points lower at 6 months (after the contest had ended), with mean weight-for-age z scores that were 0.071 higher at 3 months, and 0.095 higher at 6 months. Proportional bonuses led to larger and more sustained gains because of better performance by lower-ranked workers, whose efforts were not rewarded by a winner-take-all prize. Results are consistent with previous laboratory trials and athletic events, demonstrating the value of proportional rewards to improve development outcomes.

Keywords: Contest design; Performance pay; Malnutrition; Underweight; Child development (search for similar items in EconPapers)
JEL-codes: I1 M5 O1 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:146:y:2020:i:c:s0304387818300610

DOI: 10.1016/j.jdeveco.2018.10.003

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