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Incentives in the Public Sector: Evidence from a Government Agency

Burgess, Simon; Propper, Carol; Ratto, Marisa; Tominey, Emma (2017), Incentives in the Public Sector: Evidence from a Government Agency, The Economic Journal, 127, Feature issue, p. F117-F141. 10.1111/ecoj.12422

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Type
Article accepté pour publication ou publié
Date
2017
Journal name
The Economic Journal
Volume
127
Number
Feature issue
Publisher
Wiley
Pages
F117-F141
Publication identifier
Metadata
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Author(s)
Burgess, Simon
Institute for the study of labor [IZA]
Propper, Carol

Ratto, Marisa
Laboratoire d'Economie de Dauphine [LEDa]
Tominey, Emma
Institute for the study of labor [IZA]
Abstract (EN)
We study the impact of team-based performance pay in a major UK government agency, the public employment service. The scheme covered quantity and quality targets, measured with varying degrees of precision. We use unique data from the agency's performance management system and personnel records, linked to local labour market data. We show that on average the scheme had no significant effect but had a substantial positive effect in small teams, fitting an explanation combining free riding and peer monitoring. The impact was greater on better-measured quantity outcomes than quality outcomes. The scheme was very cost effective in small offices.
Subjects / Keywords
personnel economics; teams; Incentives; public sector; performance
JEL
J33 - Compensation Packages; Payment Methods
J45 - Public Sector Labor Markets
D23 - Organizational Behavior; Transaction Costs; Property Rights