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Title: Performance Pay and the White-Black Wage Gap
Authors: Heywood, John S.
Parent, Daniel
Keywords: Racial wage differentials
compensation practices
Issue Date: 2009-05
Series/Report no.: Cahiers du CIRPÉE;09-16
Abstract: We show that the reported tendency for performance pay to be associated with greater wage inequality at the top of the earnings distribution applies only to white workers. This results in the white-black wage differential among those in performance pay jobs growing over the earnings distribution even as the same differential shrinks over the distribution for those not in performance pay jobs. We show this remains true even when examining suitable counterfactuals that hold observables constant between whites and blacks. We explore reasons behind our finding that performance pay is associated with greater racial earnings gaps at the top of the wage distribution focusing on the interactions between discrimination, unmeasured ability and selection.
URI: http://132.203.59.36/CIRPEE/cahierscirpee/2009/files/CIRPEE09-16.pdf
https://depot.erudit.org/id/003015dd
Appears in Collections:Cahiers de recherche du CIRPÉE

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