2850 Performance Pay and Wage Inequality

  title={2850 Performance Pay and Wage Inequality},
  author={Thomas Lemieux and W. Bentley MacLeod and Daniel Parent},
Performance Pay and Wage Inequality 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… CONTINUE READING
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