Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/306677 
Year of Publication: 
2024
Series/Report no.: 
GLO Discussion Paper No. 1524
Publisher: 
Global Labor Organization (GLO), Essen
Abstract: 
Increased wages and productivity associated with performance pay can be beneficial to both employers and employees. However, performance pay can also entail unintended consequences for workers' well-being. This study is the first to systematically examine the association between performance pay and loneliness, a significant social well-being concern. Using representative survey data from Germany, I find that performance pay is positively associated with incidence, dimensions, and intensity of loneliness. Correspondingly, performance pay is negatively associated with social life satisfaction of the workers. The findings also hold in sensible instrumental variable estimations addressing the potential endogeneity of performance pay and in various robustness checks. Investigating the potential role of moderating factors reveals that the association between performance pay and loneliness is particularly large for private sector employees. Finally, implications are discussed.
Subjects: 
Performance Pay
Loneliness
Social Life
Well-Being
SOEP
JEL: 
J33
I31
J32
I10
Document Type: 
Working Paper

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