NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Performance Pay and Wage Inequality

Thomas Lemieux, W. Bentley MacLeod, Daniel Parent

NBER Working Paper No. 13128
Issued in May 2007
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 piece-rates. We find that compensation in performance-pay jobs is more closely tied to both observed (by the econometrician) and unobserved productive characteristics of workers. Moreover, the growing incidence of performance-pay can explain 24 percent of the growth in the variance of male wages between the late 1970s and the early 1990s, and accounts for nearly all of the top-end growth in wage dispersion(above the 80th percentile).

download in pdf format
   (459 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w13128

Published: Thomas Lemieux & W. Bentley MacLeod & Daniel Parent, 2009. "Performance Pay and Wage Inequality-super-," The Quarterly Journal of Economics, MIT Press, vol. 124(1), pages 1-49, February. citation courtesy of

Users who downloaded this paper also downloaded* these:
Lemieux w12077 Post-Secondary Education and Increasing Wage Inequality
Lavy w10622 Performance Pay and Teachers' Effort, Productivity and Grading Ethics
Gibbons w6695 Incentives in Organizations
Lazear w5672 Performance Pay and Productivity
Muralidharan and Sundararaman w15323 Teacher Performance Pay: Experimental Evidence from India
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us