Performance pay and work hours: US survey evidence

Abstract

Abstract Using US survey data, we show that those on performance pay work substantially longer hours. This remains in worker fixed-effect estimates and in worker with employer fixed-effect estimates. The magnitudes confirm increased hours as a dimension of the anticipated effort response and long hours as a potential intermediary between performance pay and reduced worker health. Despite managers being the most likely to both receive performance pay and work long hours, this association largely reflects sorting and not the behavioral response evident for other workers.