Do wage differences between workers with high and low levels of education, between males and females and between workers with different levels of experience reflect differences in productivity? We address this set of questions on the basis of a data set with variables for individual workers matched with a comprehensive data set for manufacturing plants in Norway for the period 1986-93. The results suggest that workers with higher education tend to be more productive, roughly in accordance to their wage premium. Female workers are cet par. found to be less productive than male workers, and this is reflected in their wages. Experienced workers are on average found to be more productive. For workers with 8 to 15 years of experience, the productivity premium exceeds the wage premium, while the opposite is the case for workers with more than 15 years of experience.

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. In 1998 the Norwegian government introduced a program that increased parents' incentives to stay home with children under the age of three. Many eligible children had older siblings, and we investigate how this program affected long-run educational outcomes of the older siblings. Terms of use: Documents in EconStor mayUsing comprehensive administrative data, we estimate a difference-in-differences model which exploits differences in older siblings' exposures to the program. We find a significant positive treatment effect on older siblings' 10th grade GPA, and this effect seems to be largely driven by mother's reduced labor force participation and not by changes in family income or father's labor force participation.JEL-Code: D130, H310, J220.

PurposeThe purpose of this paper is to improve our understanding of why some firms tie compensation to worker performance as well as the variation in type of performance pay system across firms.Design/methodology/approachThe study first presents a theoretical framework that motivates n empirical study of performance‐related pay. The data are based on Norwegian establishment surveys from 1997 and 2003. The empirical analysis addresses determinants of adoption of performance pay systems.FindingsPerformance‐related pay is more prevalent in firms where workers of the main occupation have a high degree of autonomy in how to organise their work. Performance pay is also more widespread in large firms, but is less common in highly unionised firms and in firms where wages are determined through centralised bargaining. Results show that performance pay is on the rise in Norway, even after accounting for changes in industry structure, bargaining regime, and union density. Finally, it is found that the incidence of performance‐related pay relates positively to product‐market competition and foreign ownership.Originality/valueThe paper provides new empirical evidence on the use of performance‐related pay. The results support an interpretation of incentive pay as motivated by agency problems, and provide new evidence on the relationship between payment schemes and institutions such as unions and bargaining framework.