dc.contributor.author | Barth, Erling | |
dc.contributor.author | Bratsberg, Bernt | |
dc.contributor.author | Hægeland, Torbjørn | |
dc.contributor.author | Raaum, Oddbjørn | |
dc.date.accessioned | 2011-11-07T17:09:33Z | |
dc.date.available | 2011-11-07T17:09:33Z | |
dc.date.issued | 2008 | |
dc.identifier.issn | 1892-753x | |
dc.identifier.uri | http://hdl.handle.net/11250/180677 | |
dc.description.abstract | Abstract:
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 effort increase within-firm wage inequality, while group-based bonuses have minor effects on wage dispersion. Theory also predicts an interaction between performance-related pay and union bargaining, where union power reduces the impact of performance pay on wage dispersion. The empirical contribution utilizes two recent Norwegian employer surveys, linked to a full set of employee records. A longitudinal sub-sample allows for identification based on fixed establishment effects. Introduction of performance-related pay is shown to raise residual wage inequality in nonunion firms, but not in firms with high union density. Our findings suggest that even though performance-related pay appears to be on the rise, the overall impact on wage dispersion is likely to be small, particularly in European countries with strong unions.
Keywords: Performance related pay, wage inequality, union bargaining | no_NO |
dc.language.iso | eng | no_NO |
dc.publisher | Statistics Norway, Research Department | no_NO |
dc.relation.ispartofseries | Discussion Papers;No. 535 | |
dc.subject | Wages | no_NO |
dc.subject | Union bargaining | no_NO |
dc.subject | Performance related pay | no_NO |
dc.subject | JEL classification: J31 | no_NO |
dc.subject | JEL classification: J33 | no_NO |
dc.title | Performance pay and within-firm wage inequality | no_NO |
dc.type | Working paper | no_NO |
dc.subject.nsi | VDP::Social science: 200::Economics: 210::Economics: 212 | no_NO |
dc.source.pagenumber | 38 s. | no_NO |