Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/101842
Authors: 
Bryson, Alex
Forth, John
Stokes, Lucy
Year of Publication: 
2014
Series/Report no.: 
IZA Discussion Papers 8360
Abstract: 
Using nationally representative linked employer-employee data we find one-quarter of employees in Britain are paid for performance. The log hourly wage gap between performance pay and fixed pay employees is .36 points. This falls to .15 log points after controlling for observable demographic, job and workplace characteristics. It falls still further to .10 log points when comparing "like" employees in the same workplace, indicating that performance pay contracts are used in higher paying workplaces. The premium rises markedly as one moves up the wage distribution: it is seven times higher at the 90th percentile than it is at the 10th percentile in the wage distribution (.42 log points compared to .06 log points).
Subjects: 
wages
wage inequality
performance pay
bonuses
JEL: 
J33
Document Type: 
Working Paper

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