Wages and performance-based pay: Evidence from the NLSY

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Abstract

The link between performance and pay should be strongest where performance is more accurately observed, Brown (Industrial and Labor Relations Review, 1990, 43, 1655-1825; RAND Journal of Economics, 1992, 23, 366-375). More productive workers self-select into jobs with performance-based pay. Consequently, workers whose pay is based on performance should earn more than those whose pay is not based on such measures. This paper adds to the literature on the subject by providing new empirical evidence for Brown's model using the National Longitudinal Surveys of Youth (NLSY) data.

Original languageEnglish
Pages (from-to)241-246
Number of pages6
JournalEconomics Letters
Volume51
Issue number2
DOIs
StatePublished - May 1996

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Keywords

  • NLSY
  • Pay
  • Performance
  • Wages

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