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Bonus Culture: Competitive Pay, Screening, and Multitasking
Benabou, Roland; Tirole, Jean - Institute for the Study of Labor (IZA) - 2013
talented workers leads to an escalating reliance on performance pay and other high-powered incentives, thereby shifting effort … distorts incentives downward in order to extract rents. More generally, as declining market frictions lead employers to compete …, while inequality tends to rise monotonically. Bonus caps and income taxes can help restore balance in agents' incentives and …
Persistent link: https://www.econbiz.de/10010635587
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You Don't Always Get What You Pay For
Schnedler, Wendelin - Institute for the Study of Labor (IZA) - 2007
Consider a principal-agent relationship in which more effort by the agent raises the likelihood of success. Does rewarding success, i.e., paying a bonus, increase effort in this case? I find that bonuses have not only an incentive but also an income effect. Overall, bonuses paid for success may...
Persistent link: https://www.econbiz.de/10005762122
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On the Sorting of Physicians across Medical Occupations
Courty, Pascal; Marschke, Gerald - Institute for the Study of Labor (IZA) - 2008
less exposed to moral hazard risk, face more powerful performance incentives, and are more productive. Under-consumption of …
Persistent link: https://www.econbiz.de/10005703622
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Understanding Severance Pay
Parsons, Donald O. - Institute for the Study of Labor (IZA) - 2013
Severance pay, a fixed-sum payment to workers at job separation, has been the focus of intense policy concern for the last several decades, but much of this concern is unearned. The design of the ideal separation package is outlined and severance pay emerges as a natural component of job...
Persistent link: https://www.econbiz.de/10010884124
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Health Effects of Containing Moral Hazard: Evidence from Disability Insurance Reform
Garcia-Gomez, Pilar; Gielen, Anne C. - Institute for the Study of Labor (IZA) - 2014
We exploit an age discontinuity in a Dutch disability insurance (DI) reform to identify the health impact of stricter eligibility criteria and reduced generosity. Women subject to the more stringent rule experience greater rates of hospitalization and mortality. A €1,000 reduction in annual...
Persistent link: https://www.econbiz.de/10010886130
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Moral Hazard and Less Invasive Medical Treatment for Coronary Artery Disease: The Case of Cigarette Smoking
Margolis, Jesse; Hockenberry, Jason; Grossman, Michael; … - Institute for the Study of Labor (IZA) - 2014
Comparisons of the effectiveness of two common procedures for Coronary Artery Disease: Percutaneous Coronary Intervention (PCI) and Coronary Artery Bypass Graft (CABG). Evidence indicates that CABG – the more invasive procedure – leads to superior long term outcomes for otherwise similar...
Persistent link: https://www.econbiz.de/10010959543
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Ability Dispersion and Team Performance: A Field Experiment
Hoogendoorn, Sander M.; Parker, Simon C.; Praag, Mirjam … - Institute for the Study of Labor (IZA) - 2012
This paper studies the impact of diversity in cognitive ability among members of a team on their performance. We conduct a large field experiment in which teams start up and manage real companies under identical circumstances. Exogenous variation in – otherwise random – team composition is...
Persistent link: https://www.econbiz.de/10010959852
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Active Unemployment Insurance
Røed, Knut - Institute for the Study of Labor (IZA) - 2012
– to minimize the conflict between income insurance and work incentives and to prevent the economic crisis from causing a …
Persistent link: https://www.econbiz.de/10010548159
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Severance Pay Mandates: Firing Costs, Hiring Costs, and Firm Avoidance Behaviors
Parsons, Donald O. - Institute for the Study of Labor (IZA) - 2011
The potentially adverse labor market effects of severance pay mandates are a continuing source of policy concern. In a seminal study, Lazear (1990) found that contract avoidance of severance pay firing costs was theoretically simple – a bonding scheme would do – but that empirically the...
Persistent link: https://www.econbiz.de/10009225769
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Firms' Moral Hazard in Sickness Absences
Böheim, René; Leoni, Thomas - Institute for the Study of Labor (IZA) - 2011
Sick workers in many countries receive sick pay during their illness-related absences from the workplace. In several countries, the social security system insures firms against their workers' sickness absences. However, this insurance may create moral hazard problems for firms, leading to the...
Persistent link: https://www.econbiz.de/10009323542