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Fixed Wages, Piece Rates, and Intertemporal Productivity: A Study of Tree Planters in British Columbia

Author

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  • Harry J. Paarsch
  • Bruce Shearer
Abstract
We examine the effects of different sequences of work and rest on the daily productivity of workers who planted trees in the province of British Columbia, Canada, comparing the intertemporal productivity profiles of planters who were paid either fixed wages or piece rates. We find that planters who are paid piece rates produce more, on average, than those who are paid fixed wages, but that the productivity of piece-rate planters falls with the number of consecutive days worked; the fall in productivity is between three and five percent. Fixed-wage planters, on the other hand, showed no such decreases. Nous considérons les effets de différentes séquences de travail et de repos sur la productivité quotidienne des travailleurs qui s'occupent de plantation d'arbres en Colombie-Britannique. Nous faisons une comparaison des profils intertemporels de la productivité des planteurs qui sont payés à taux fixe avec celle des planteurs qui sont payés à la pièce. Nos résultats suggèrent que les planteurs qui sont payés à la pièce sont plus productifs que ceux qui sont payés un taux fixe. Pourtant, la productivité des planteurs qui sont payés à la pièce diminue avec le nombre de journées consécutives travaillées; la baisse de productivité est entre trois et cinq pour cent par jour. Les travailleurs qui sont payés un taux fixe ne démontrent aucune réduction de productivité.

Suggested Citation

  • Harry J. Paarsch & Bruce Shearer, 1997. "Fixed Wages, Piece Rates, and Intertemporal Productivity: A Study of Tree Planters in British Columbia," CIRANO Working Papers 97s-01, CIRANO.
    • Handle: RePEc:cir:cirwor:97s-01
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    References listed on IDEAS

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    1. Edward P. Lazear & Paul Oyer, 2012. "Personnel Economics [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    2. Paarsch, Harry J & Shearer, Bruce, 2000. "Piece Rates, Fixed Wages, and Incentive Effects: Statistical Evidence from Payroll Records," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(1), pages 59-92, February.
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    Cited by:

    1. Lazear, Edward, 2003. "Output-Based Pay: Incentives, Retention or Sorting?," IZA Discussion Papers 761, Institute of Labor Economics (IZA).
    2. Edward P. Lazear, 2000. "Performance Pay and Productivity," American Economic Review, American Economic Association, vol. 90(5), pages 1346-1361, December.
    3. Bandiera, Oriana & Barankay, Iwan & Rasul, Imran, 2004. "Relative and Absolute Incentives: Evidence on Worker Productivity," CEPR Discussion Papers 4431, C.E.P.R. Discussion Papers.
    4. Edward P. Lazear, 1999. "Output-based Pay: Incentives or Sorting?," NBER Working Papers 7419, National Bureau of Economic Research, Inc.
    5. Angelova, Vera & Giebe, Thomas & Ivanova-Stenzel, Radosveta, 2022. "Competition and fatigue," Journal of Economic Behavior & Organization, Elsevier, vol. 198(C), pages 236-249.
    6. Oriana Bandiera & Iwan Barankay & Imran Rasul, 2005. "Social Preferences and the Response to Incentives: Evidence from Personnel Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(3), pages 917-962.

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    More about this item

    Keywords

    Compensation Systems; Productivity; Rest; Recuperation; Systèmes de compensation; productivité; repos; récupération;
    All these keywords.

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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