While performance pay can benefit firms and workers by increasing productivity and wages, it has also been associated with a deterioration of worker health. The transmission mechanisms for this deterioration remain in doubt. We examine the hypothesis that increased stress is one transmission...

We study the link between performance pay and alcohol use in Germany, a country with mandated health insurance. Previous research from the US argues that alcohol use as a form of "self-medication" may be a natural response to the stress and uncertainty of performance pay when many workers do not...

This work contributes to the literature demonstrating an important role for psychological traits in labor market decisions. We show that West German workers with an internal locus of control sort into jobs with performance appraisals. Appraisals provide workers who believe they control their...

We examine the hypothesis that performance pay increases work hours. If performance pay incentivizes greater hours, this could cause the demonstrated link between performance pay and poorer worker health. Using US survey data, we confirm greater work hours and an increased likelihood of long...

A large body of research links performance pay to poorer worker health. The exact mechanism generating this link remains in doubt. We examine a common suspect, that performance pay causes employees to work longer hours in pursuit of higher pay. Using representative data for the UK, we...