Performance pay and wage inequality by Thomas Lemieux

Cover of: Performance pay and wage inequality | Thomas Lemieux

Published by National Bureau of Economic Research in Cambridge, Mass .

Written in English

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Subjects:

  • Bonus system -- United States -- Mathematical models,
  • Wages -- United States

Edition Notes

Book details

StatementThomas Lemieux, W. Bentley MacLeod, Daniel Parent.
SeriesNBER working paper series -- no. 13128., Working paper series (National Bureau of Economic Research) -- working paper no. 13128.
ContributionsMacLeod, W. Bentley 1954-, Parent, Daniel., National Bureau of Economic Research.
The Physical Object
Pagination45 p. :
Number of Pages45
ID Numbers
Open LibraryOL17634129M
OCLC/WorldCa153168896

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Performance Pay and Wage Inequality Thomas Lemieux, W. Bentley MacLeod, Daniel Parent. NBER Working Paper No. Issued in May NBER Program(s):Labor Studies. We document that an increasing fraction of jobs in the U.S. labor market explicitly pay workers for their performance using bonuses, commissions, or by: The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First Century (The Princeton Economic History of the Western World Book 69) Walter Scheidel out of 5 stars strategy builds upon the idea that the wages of performance-pay workers are more closely linked to productive ability than are the wages of non-performance-pay workers.

This can result in in-creasing wage inequality as the fraction of workers being paid for performance grows over time, or as the inequality-enhancing ef. Performance Pay and Wage Inequality Thomas Lemieux, W.

Bentley MacLeod, and Daniel Parent NBER Working Paper No. May JEL No. J31,J33 ABSTRACT We document that an increasing fraction of jobs in the U.S. labor market explicitly pay workers for their performance using bonuses, commissions, or by: Performance Pay and Wage Inequality Thomas Lemieux W.

Bentley MacLeod Daniel Parent Abstract An increasing fraction of jobs in the U.S. labor market explicitly pay workers for their performance using bonus pay, commissions, or piece-rate contracts. Thus, performance pay provides a channel through which underlying changes in returns to skill get translated into higher wage inequality.

We conclude that this channel accounts for 21% of the growth in the variance of male wages between the late s and the early Performance pay and wage inequality book and for most of the increase in wage inequality above the eightieth. We conclude that the growing incidence of performance pay accounts for 25 Performance pay and wage inequality book of the growth in male wage inequality between the late s and the early s.

An increasing fraction of jobs in the U.S. labor market explicitly pay workers for their performance using a. Lemieux, T, W B MacLeod and D Parent (), “Performance Pay and Wage Inequality”, The Quarterly Journal of Economics (1): Endnotes.

1 Policy initiatives such as the Paycheck Fairness Act in the US have been very controversial. This bill, first introduced inwas meant to close some of the pay gap by “making wages more.

Performance Pay and Wage Inequality. IZA Discussion Paper No. Number of pages: 48 Posted: 05 Jul Downloads Performance Pay and Wage Inequality.

NBER Working Paper No. w Number of pages: 47 Posted: 27 Jun Last Revised: 17 Aug You are currently viewing this paper. the growing incidence of performance pay accounts for 25 percent of the growth in male wage inequality between the late s and the early s, and for most of the growth in top-end wage inequality (above the 80th percentile) during this period.

1 Introduction. "Performance Pay and Wage Inequality," The Quarterly Journal of Economics, Oxford University Press, vol. (1), pages Thomas Lemieux & W. Bentley MacLeod & Daniel Parent, " Performance Pay and Wage Inequality," NBER Working PapersNational Bureau of.

In their seminal paper for the United States Lemieux et al. () (henceforth LMP) show that performance pay (PP) accounted for one-fifth of the growth in wage inequality among men between the late s and early s, and most of the growth in wage inequality among high earners in the top quintile.

Performance Pay and Wage Inequality. Thomas Lemieux, W. Bentley MacLeod, Daniel Parent. NBER Working Paper No. Issued in May Books Recent Books Earlier Books (by decade) Browse books by Series Chapters from Books In Process Free. Analyse to what extent performance-related pay systems impact on the gender wage gap and on the effort-reward balance To reply to these questions the 6th European Working Conditions Survey is used as it provides information on wages, working conditions and systems of pay evaluation.

While wage inequality in Taiwan is stable or declining, we find that that result is completely reversed once performance pay is included in wage income. 8 This is consistent with the experience in. Get this from a library.

Performance pay and wage inequality. [Thomas Lemieux; W Bentley MacLeod; Daniel Parent; National Bureau of Economic Research.] -- We document that an increasing fraction of jobs in the U.S. labor market explicitly pay workers for their performance using bonuses, commissions, or piece-rates.

We find that compensation in. She runs one of America’s premiere performance advisory firms and has authored a basic performance pay text, the Fair Pay, Fair Play: Aligning Executive Performance and Pay.[pullquote]Executives devote inordinate energy and time to manipulating performance criteria.[/pullquote] We seem to have somewhat of a contradiction here.

A comprehensive empirical study of wage inequality in the US concludes that "a growing incidence of performance-pay accounts for 25 percent of the growth in male wage inequality.

This paper examines the impact of performance-related pay on wage differentials within firms. Our theoretical framework predicts that, compared to a fixed pay system, pay schemes based on individual output increase within-firm wage inequality, while.

In effect the studyfrom the National Bureau of Economic Research concludes that pay for performance has significantly contributed to wage inequality by boosting the income of the most productive while incomes of less productive workers, and those not in a pay for performance program, remain stagnant.

Pay for Performance is the best resource to date on the issues of whether these concepts work and how they can be applied most effectively in the workplace. This important book looks at performance appraisal and pay practices in the private sector and describes whether--and how--private industry experience is revelant to federal pay reform.

Within-Job Wage Inequality: Performance Pay and Job Relatedness Rongsheng Tang, Yang Tang, Ping Wang. NBER Working Paper No. Issued in June NBER Program(s):Economic Fluctuations and Growth, Labor Studies Over the past few decades, we find that about 80% of the widening residual wage inequality to be within jobs.

"Performance Pay and Wage Inequality," The Quarterly Journal of Economics, Oxford University Press, vol. (1), pages Lemieux, Thomas & MacLeod, W. Bentley & Parent, Daniel, " Performance Pay and Wage Inequality," IZA Discussion PapersInstitute of.

IZA DP No. Performance Pay and Wage Inequality Thomas Lemieux, W. Bentley MacLeod, Daniel Parent published in: Quarterly Journal of Economics,(1),   This paper is, to the best of my knowledge, the first attempt in the literature to study within-firm wage inequality due to performance pay in a general equilibrium model with heterogeneous firms.

The theory is tractable enough to enable an analytical decomposition of wage inequality and a comparative statics analysis of the within-firm component. In Louisiana, for instance, the gender pay gap is 31%, the largest wage gap in the nation.   California has the smallest pay gap at 12%, with full-time, year-round working women making $ cents ($49, median) for a man's dollar ($55,).

 . We show that the reported tendency for performance pay to be associated with greater wage inequality at the top of the earnings distribution applies only to white workers.

This results in the white-black wage differential among those in performance pay jobs growing over the earnings distribution even as the same differential shrinks over the distribution for those not in performance pay jobs. PERFORMANCE PAY AND WAGE INEQUALITY.

Thomas Lemieux (), W. Bentley Macleod and Daniel Parent () Departmental Working Papers from McGill University, Department of Economics.

Abstract: An increasing fraction of jobs in the U.S. labor market explicitly pay workers for their performance using a bonus, a commission, or a piece rate.

In this paper. In Performance Pay and Wage Inequality, which is forthcoming in the Quarterly Journal of Economics, we evaluate the change in components of pay across different types of jobs, and investigate whether these changes have lead to the increase in wage inequality.

We use data from the Panel Study of Income Dynamics (PSID), and our empirical strategy builds upon two of the most. Performance pay increases wage inequality for two reasons.

First, such jobs usually pay more than jobs without performance pay. Performance pay makes workers more productive, allowing employers to.

Lazear, E (), “Performance Pay and Productivity”, American Economic Review, 90(5),– Lemieux, T and D Parent (), “Performance Pay and Wage Inequality”, Quarterly Journal of Economics (1) Manning, A (), Monopsony in motion: Imperfect competition in Labour Markets, Princeton University Press.

Wage with moderate performance pay accounts for %, and wage with strong performance pay is %. When we see more in detail in level of the performance pay wages by occupation, wage with weak performance pay accounts for.

Manning and Saidi () estimate that the contribution of performance pay to the gender wage gap is at most percentage points. To examine whether the gender differences in the receipt of competitive performance pay in Table 2 translate to gender differences in wages, we estimate log-wage models with and without each performance pay indicator.

performance pay has worsened wage inequality. This contradicts the argument of Lemieux et al. () that growth in the prevalence of performance pay can worsen wage inequality and vice versa. This unprecedented phenomenon observed in Korea results primarily from the widening performance pay gap between small and large employers, while.

Downloadable. Using data from the British Household Panel Survey (BHPS) we show performance pay (PP) increased earnings dispersion among men and women, and to a lesser extent among full-time working women, in the decade of economic growth which ended with the recession of PP was also associated with some compression in the lower half of the wage distribution for women.

international trade on wage inequality are summarized as follows: (a) Performance pay generates wage dispersion within –rms. By punishing or reward-ing employees according to their performance, high-powered incentives amplify the e⁄ect of idiosyncratic performance on wages.

This implies Var(wej) >0 in every –rm. This article examines the relationship between performance-based pay and widening wage inequality using data from the Employer Costs for Employee Compensation (ECEC). The results suggest that jobs using performance-based pay have made only a modest contribution to increased inequality during the to period.

Performance Pay and Wage Inequality. Thomas Lemieux (), W. Bentley Macleod and Daniel Parent (). NoNBER Working Papers from National Bureau of Economic Research, Inc Abstract: We document that an increasing fraction of jobs in the U.S.

labor market explicitly pay workers for their performance using bonuses, commissions, or piece-rates. We find that compensation in performance-pay.

Lemieux, T, W B MacLeod and D Parent (), “Performance Pay and Wage Inequality”, The Quarterly Journal of Economics (1): Endnotes. 1 Policy initiatives such as the Paycheck Fairness Act in the US have been very controversial. Performance pay, trade and inequality. Germán Pupato. Journal of Economic Theory,vol.

issue C, Abstract: This paper introduces moral hazard into a general equilibrium model with heterogeneous firms to study wage inequality between homogeneous workers. Optimal performance pay contracts yield non-degenerate wage distributions among co-workers, enabling the analysis of.

Moreover, the growing incidence of performance-pay can explain 24 percent of the growth in the variance of male wages between the late s and the early s, and accounts for nearly all of the top-end growth in wage dispersion (above the 80th percentile).

Here is the link, here is a non-gated version. It is perhaps simplistic to say the. Scott Adams and John Heywood, both economists at the University of Wisconsin and co-authors of the EPI book, elaborated on this fallacy that performance pay was the backbone of the U.S.

private sector. Adams calculates that only one in 15 private-sector workers have pay tied to performance, or about one in 10 when bonuses are factored in.CiteSeerX - Document Details (Isaac Councill, Lee Giles, Pradeep Teregowda): An increasing fraction of jobs in the U.S.

labor market explicitly pay workers for their performance using a bonus, a commission, or a piece rate. In this paper, we look at the e¤ect of the growing incidence of performance pay on wage inequality.

The basic premise of the paper is that performance pay jobs have a more.

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