Does Performance Pay Increase Alcohol and Drug Use?
Colin Green (),
John Heywood () and
Working Paper Series from Department of Economics, Norwegian University of Science and Technology
Using a panel of young workers, we show cross-sectional evidence of greater alcohol and illicit drug use among those paid performance pay. Recognizing that this likely reflects worker sorting, we first control for risk and ability proxies. We then control for worker fixed effects and finally for worker-employer match fixed effects. These estimates continue to indicate that the risk of substance use increases when workers are moved to performance pay. While robustness tests examine heterogeneous responses, our evidence fits conjectures that stress and effort increase with performance pay as does the spillover coping mechanism of alcohol and drug use.
Keywords: Performance Pay; Alcohol; Drugs; Sorting (search for similar items in EconPapers)
JEL-codes: I12 J33 (search for similar items in EconPapers)
Pages: 41 pages
New Economics Papers: this item is included in nep-hea, nep-hrm and nep-lma
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Journal Article: Does performance pay increase alcohol and drug use? (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:nst:samfok:17618
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