TY  - JOUR
AU  - Lemieux,Thomas
AU  - MacLeod,W. Bentley
AU  - Parent,Daniel
TI  - Performance Pay and Wage Inequality
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13128
PY  - 2007
Y2  - May 2007
UR  - http://www.nber.org/papers/w13128
L1  - http://www.nber.org/papers/w13128.pdf
N1  - Author contact info:
Thomas Lemieux
Department of Economics
University of British Columbia
#997-1873 East Mall
Vancouver, BC V6T 1Z1
Canada
Tel: 604/822-2092
Fax: 604/822-5915
E-Mail: tlemieux@interchange.ubc.ca

W. Bentley MacLeod
Department of Economics
Columbia University
420 West 118th Street, MC 3308
New York, NY 10027
Tel: 212/854-4212
Fax: 212/854-4782
E-Mail: bentley.macleod@columbia.edu

Daniel Parent
Department of Economics
McGill University
Room 443 Leacock Building
855 Sherbrooke Street West
Montreal, Quebec H3A 2T7
Tel: 514/398-4846
E-Mail: daniel.parent@mcgill.ca
AB  - We document that an increasing fraction of jobs in the U.S. labor market explicitly pay workers for their performance using bonuses, commissions, or piece-rates. We find that compensation in performance-pay jobs is more closely tied to both observed (by the econometrician) and unobserved productive characteristics of workers. Moreover, the growing incidence of performance-pay can explain 24 percent of the growth in the variance of male wages between the late 1970s and the early 1990s, and accounts for nearly all of the top-end growth in wage dispersion(above the 80th percentile).
ER  -