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Journal Article

Has performance pay increased wage inequality in Britain?

Authors

Publication date

Aug 2016

Summary

Using data from the British Household Panel Survey (BHPS) we show performance pay (PP) increased earnings dispersion among men and women, and to a lesser extent among full-time working women, in the decade of economic growth which ended with the recession of 2008. PP was also associated with some compression in the lower half of the wage distribution for women. The effects were predominantly associated with a broad measure of PP that included bonuses. However, these effects were modest, typically not exceeding a 0.05 log points change in log wage differentials over the decade. Moreover there is no indication that PP became increasingly prevalent, as some had predicted, over the decade prior to recession.

Published in

Labour Economics

Volume and page numbers

41 , 149 -161

DOI

http://dx.doi.org/10.1016/j.labeco.2016.05.002

ISSN

16

Subjects

Labour Economics and Wages And Earnings

Links

University of Essex, Albert Sloman Library Periodicals *restricted to University of Essex registered users* - http://serlib0.essex.ac.uk/record=b1650556~S5

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