What is it about?
We show that couples sort on performance pay with dual receipt couples much more likely than predicted by random. In addition, we show that the return to performance pay appears largely invariant to whether one's spouse earns performance pay. The major exception is that among the college educated, the return to performance pay is larger for women when their spouse also receives performance pay. Thus, dual receipt households concentrate the returns to performance pay hinting that performance pay may influence the distribution of household income.
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Why is it important?
With the increase in performance related pay, understanding the dynamics when married couples both have performance pay jobs is important to know in terms of how much money it generates and the distribution of financial and time resources in the household.
Perspectives
This is part of a series of articles that is starting to look at the unintended consequences of performance related pay so that we can get a better and more holistic understanding of how performance related pay interacts with other socioeconomic outcomes.
Professor Keith A Bender
University of Aberdeen
Read the Original
This page is a summary of: Performance pay and assortative matching, Scottish Journal of Political Economy, September 2019, Wiley,
DOI: 10.1111/sjpe.12232.
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