An Experimental Examination of Labor Supply and Work Intensities

Dickinson, David L.

doi:10.1086/209934

Cited by 123 publications

(108 citation statements)

References 24 publications

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“…In contrast, laboratory experiments studying productivity may have difficulty replicating the risky environment implied by the standard principal-agent model. These experiments often involve tasks with little or no productivity risk: stuffing envelopes (Falk and Ichino, 2006), typing paragraphs (Dickinson, 1999). This hinders their ability to evaluate questions relating to risk and contracts.…”

Section: Resultsmentioning

confidence: 99%

Sorting, incentives and risk preferences: Evidence from a field experiment

Bellemare

Shearer

2010

Economics Letters

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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. Terms of use: Documents in Sorting, Incentives and Risk Preferences: Evidence from a Field ExperimentCharles Bellemare Bruce S. Shearer The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit company supported by Deutsche Post World Net. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. The, often observed, positive correlation between incentive intensity and risk has been explained in two ways: the presence of transaction costs as determinants of contracts and the sorting of risk-tolerant individuals into firms using high-intensity incentive contracts. The empirical importance of sorting is perhaps best evaluated by directly measuring the risk tolerance of workers who have selected into incentive contracts under risky environments.We use experiments, conducted within a real firm, to measure the risk preferences of a sample of workers who are paid incentive contracts and face substantial daily income risk.Our experimental results indicate the presence of sorting; Workers in our sample are risktolerant. Moreover, their level of tolerance is considerably higher than levels observed for samples of individuals representing broader populations. Interestingly, the high level of risk tolerance suggests that both sorting and transaction costs are important determinants of contract choices when workers have heterogeneous preferences.JEL Classification: J33, M52, C93

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Section: Resultsmentioning

confidence: 99%

Sorting, incentives and risk preferences: Evidence from a field experiment

Bellemare

Shearer

2010

Economics Letters

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“…If a submitted answer is not correct, the individual is informed that her response was not correct and the same letter is displayed until the correct answer is provided. Once the two minutes have elapsed, a vertical bar 4 Dickinson (1999) is the notable experimental study regarding on-the-job leisure. In the field, leisure at work takes multiple forms: surfing the net, long coffee breaks, office gossiping, etc.…”

Section: Treatmentsmentioning

confidence: 99%

Competitive Preferences and Status as an Incentive: Experimental Evidence

2010

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Abstract:In this paper, we investigate individuals' investment in status in an environment where no monetary return can possibly be derived from reaching a better relative position. We use a real-effort experiment in which we permit individuals to learn and potentially improve their status (rank). We find that people express both intrinsic motivation and a taste for status. Indeed, people increase their effort when they are simply informed about their relative performance, and people pay both to sabotage others' output and to artificially increase their own relative performance. In addition, stronger group identity favors positive rivalry and discourages sabotage among peers.

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“…Using a somewhat different model, Dickinson (1999) also finds that the effect of a compensated increase in the piece-rate on hours of work is ambiguous.…”

Section: A Generalized Model Of Labour Supplymentioning

confidence: 99%

Labour Supply, Work Effort and Contract Choice: Theory and Evidence on Physicians

2010

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We develop and estimate a generalized labour supply model that incorporates work effort into the standard consumption-leisure trade-off. We allow workers a choice between two contracts: a piece rate contract, wherein he is paid per unit of service provided, and a mixed contract, wherein he receives an hourly wage and a reduced piece rate. This setting gives rise to a nonconvex budget set and an efficient budget constraint (the upper envelope of contract-specific budget sets). We apply our model to data collected on specialist physicians working in the Province of Quebec (Canada). Our data set contains information on each physician's labour supply and their work effort (as proxied by clinical services per hour worked). It also covers a period of policy reform under which physicians could choose between two compensation systems: the traditional fee-for-service, under which physicians receive a fee for each service provided, and mixed remuneration, under which physicians receive a per diem as well as a reduced fee-for-service. We estimate the model using a discrete choice approach. We use our estimates to simulate labour-supply elasticities and to predict (ex ante) the effects of contract on physician behaviour. Our results show that physician services and effort are more sensitive to contractual changes than is their time spent seeing patients; time spent on administrative duties and teaching is also sensitive to contractual changes. Our results also suggest that a mandatory reform, forcing all physicians to adopt the mixed remuneration system, would have had substantially larger effects on physician behaviour than those observed under the voluntary reform.

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An Experimental Examination of Labor Supply and Work Intensities

Cited by 123 publications

References 24 publications

Sorting, incentives and risk preferences: Evidence from a field experiment

Sorting, incentives and risk preferences: Evidence from a field experiment

Competitive Preferences and Status as an Incentive: Experimental Evidence

Labour Supply, Work Effort and Contract Choice: Theory and Evidence on Physicians

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