Leisure time, performance pay, and crowding-out

Timo Vogelsang

Economics Letters, 2023, vol. 231, issue C

Abstract: I study the performance effect of removing performance pay across various incentive domains. Subjects in the laboratory experiment receive performance pay in either the monetary or time domain during the first working period, after which the incentive is removed in the second working period. Removing performance pay decreases performance in all treatments compared to a baseline of no bonus. However, this effect is less pronounced in the time domain, where participants receive a time-off bonus that allows them to leave the laboratory earlier depending on their performance. A post-experimental questionnaire suggests reduced enjoyment of the task as a possible driver.

Keywords: Non-monetary reward; Performance pay; Crowding-out; Laboratory experiment; Time-off (search for similar items in EconPapers)
JEL-codes: C J M (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:231:y:2023:i:c:s0165176523002914

DOI: 10.1016/j.econlet.2023.111266

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