Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/250661 
Year of Publication: 
2022
Series/Report no.: 
IZA Discussion Papers No. 15000
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Much of the literature on performance-related pay (PRP) and poor health relies on self-reported data, and the relationship is particularly difficult to examine due to confounding variables. To address these limitations we examine three groups of health measures using data from the UKHLS: blood pressure (n=5667), inflammation markers in blood (n=4025) and self-reported health (n=6120). Physiological markers of health allow us to circumvent some of the issues associated with self-reported measures and by using size of firm and % share of PRP workers in occupation we also statistically control for some of the endogeneity associated with self-selection bias. Regressions correcting for self-selection bias and socio-demographic covariates find that PRP contracts are associated with poorer self-reported mental health, higher systolic blood pressure and higher levels of fibrinogen. These findings have implications for firms that use PRP as they may need to implement policies to mitigate against stress.
Subjects: 
performance-related pay
health
sample selection
JEL: 
J33
M52
I1
Document Type: 
Working Paper

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