Employment contracts and stress: Experimental evidence

Julia L. Allan, Nicole Andelic, Keith Bender, Daniel Powell, Sandro Stoffel and Ioannis Theodossiou

Journal of Economic Behavior & Organization, 2021, vol. 187, issue C, 360-373

Abstract: A growing literature has found a link between performance-related pay (PRP) and poor health, but the causal direction of the relationship is not known. To address this gap, the current paper utilises a crossover experimental design to randomly allocate subjects into a work task paid either by performance or a fixed payment. Stress is measured through self-reporting and salivary cortisol. The study finds that PRP subjects had significantly higher cortisol levels and self-rated stress than those receiving fixed pay, ceteris paribus. By circumventing issues of self-report and self-selection, these results provide novel evidence for the detrimental effect PRP may have on health.

Keywords: Performance-related pay; Stress; Experiment; Cortisol (search for similar items in EconPapers)
JEL-codes: C91 I0 J33 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167268121001566
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Employment Contracts and Stress: Experimental Evidence (2021)
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:eee:jeborg:v:187:y:2021:i:c:p:360-373

DOI: 10.1016/j.jebo.2021.04.015

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Catherine Liu (repec@elsevier.com).