Social Sciences
8 years ago

Timing of wage increases boosts worker performance by 15%

Journal of Labor Economics
Wage Increases and the Dynamics of Reciprocity
Dirk Sliwka, Peter Werner

Paper Summary

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Workers perform better when their wages increase gradually over time compared to receiving a constant wage. A study found that when workers don't know in advance about the increasing wages, they work about 15% harder. This increase in effort can be explained by workers comparing their current wages to what they received previously.