Performance pay and wage inequality
By: Thomas Lemieux, W. Bentley MacLeod, Daniel Parent.
Contributors: MacLeod, W. Bentley 1954-; Parent, Daniel.; National Bureau of Economic Research.
Series: NBER working paper series -- no. 13128.; Working paper series (National Bureau of Economic Research) -- working paper no. 13128.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, Mass
Language: eng
Number of pages: 45
Subjects: Bonus system -- United States -- Mathematical models; Wages -- United States
Description: "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)."
Notes: "May 2007"

Includes bibliographical references (p. 27-29).

Also available in PDF from the NBER world wide web site (www.nber.org).