What is it about?

In this research we examine the effect of how you are paid on your stress level - both how you feel about stress and objectively how your body reacts to stress by measuring cortisol - the so-called stress hormone. We find that those who are paid directly through their performance via piece rates showed higher subjective and objective stress.

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Why is it important?

Stress is increasingly shown to be a health hazard and many workdays are lost to stress. Thus, firms should carefully think about how they pay people in order to reduce the stress to their workforce. Governments too should care about this in terms of public health.

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This page is a summary of: Employment contracts and stress: Experimental evidence, Journal of Economic Behavior & Organization, July 2021, Elsevier, DOI: 10.1016/j.jebo.2021.04.015.
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