Performance Pay, Union Bargaining and Within-Firm Wage Inequality

• Autores: Erling Barth, Bernt Bratsberg, Torbjørn Hægeland, Oddbjørn Raaum
• Localización: Oxford bulletin of economics and statistics, ISSN 0305-9049, Vol. 74, Nº. 3, 2012, págs. 327-362
• Idioma: inglés
• Texto completo no disponible (Saber más ...)
• Dialnet Métricas: 3 Citas
• Resumen

  • Theory predicts that performance pay boosts wage dispersion. Workers retain a share of individual productivity shocks and high-efficiency workers receive compensation for greater effort. Collective bargaining can mitigate the effect of performance pay on wage inequality by easing monitoring of common effort standards and group-based pay schemes. Analyses of longitudinal employer–employee data show that the introduction of performance-related pay raises wage inequality in non-union firms, but not in firms with high union density. Although performance-related pay appears to be on the rise, the overall impact on wage dispersion is likely to be small, particularly in European countries with influential unions.