Employment Contracts and Stress: Experimental Evidence

Julia Allan; Nicole Andelic; Keith Bender; Daniel Powell; Sandro Stoffel; Ioannis Theodossiou

doi:10.1016/j.jebo.2021.04.015

Employment Contracts and Stress: Experimental Evidence

Julia Allan, Nicole Andelic^* (Corresponding Author), Keith Bender, Daniel Powell, Sandro Stoffel, Ioannis Theodossiou

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

7 Citations (Scopus)

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Abstract

A growing literature has found a link between performance-related pay (PRP) and poor health, but the causal direction of the relationship is not known. To address this gap, the current paper utilises a crossover experimental design to randomly allocate subjects into a work task paid either by performance or a fixed payment. Stress is measured through self-reporting and salivary cortisol. The study finds that PRP subjects had significantly higher cortisol levels and self-rated stress than those receiving fixed pay, ceteris paribus. By circumventing issues of self-report and self-selection, these results provide novel evidence for the detrimental effect PRP may have on health.

Original language	English
Pages (from-to)	360-373
Number of pages	14
Journal	Journal of Economic Behavior and Organization
Volume	187
Early online date	21 May 2021
DOIs	https://doi.org/10.1016/j.jebo.2021.04.015
Publication status	Published - 31 Jul 2021

Bibliographical note

Funding Information:
Notes: Authors are listed in alphabetical order. We gratefully acknowledge financial support from the Scottish Economic Society on the pilot study and from the ESRC (Grant ES/R01163X/1). We also extend our thanks to Matthew McGinty, Christine Spencer and participants at the 2020 EALE/SOLE/AASLE World Conference, 2021 GLO Research Seminars, 2021 SES Conference, 2021 ICBM Conference, the Economics Centre at Curtin University, the Economics Department at St Lawrence University and the Applied Health Psychology Research Workshop and Business School at the University of Aberdeen who provided thoughtful comments on an early draft of the current manuscript. Institutional Review Board (IRB) approval was obtained from the University of Aberdeen, College of Life Sciences & Medicine Ethics Review Board (CERB/2015/5/1198). The study was pre-registered with the Open Science Framework ( https://osf.io/sxkb2 ) prior to data collection.

Data Availability Statement

Supplementary materials:
Supplementary material associated with this article can be found, in the online version, at doi:10.1016/j.jebo.2021.04.015.

Keywords

perfomance- related pay
stress
experiment
cortisol

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.jebo.2021.04.015Licence: Unspecified

Allan_etal_JEBO_Employment_Contract_And_AAM
© 2021. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
Accepted author manuscript, 605 KBLicence: CC BY-NC-ND

Cite this

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title = "Employment Contracts and Stress: Experimental Evidence",

abstract = "A growing literature has found a link between performance-related pay (PRP) and poor health, but the causal direction of the relationship is not known. To address this gap, the current paper utilises a crossover experimental design to randomly allocate subjects into a work task paid either by performance or a fixed payment. Stress is measured through self-reporting and salivary cortisol. The study finds that PRP subjects had significantly higher cortisol levels and self-rated stress than those receiving fixed pay, ceteris paribus. By circumventing issues of self-report and self-selection, these results provide novel evidence for the detrimental effect PRP may have on health.",

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note = "Funding Information: Notes: Authors are listed in alphabetical order. We gratefully acknowledge financial support from the Scottish Economic Society on the pilot study and from the ESRC (Grant ES/R01163X/1). We also extend our thanks to Matthew McGinty, Christine Spencer and participants at the 2020 EALE/SOLE/AASLE World Conference, 2021 GLO Research Seminars, 2021 SES Conference, 2021 ICBM Conference, the Economics Centre at Curtin University, the Economics Department at St Lawrence University and the Applied Health Psychology Research Workshop and Business School at the University of Aberdeen who provided thoughtful comments on an early draft of the current manuscript. Institutional Review Board (IRB) approval was obtained from the University of Aberdeen, College of Life Sciences & Medicine Ethics Review Board (CERB/2015/5/1198). The study was pre-registered with the Open Science Framework ( https://osf.io/sxkb2 ) prior to data collection. ",

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AU - Andelic, Nicole

AU - Bender, Keith

AU - Powell, Daniel

AU - Stoffel, Sandro

AU - Theodossiou, Ioannis

N1 - Funding Information: Notes: Authors are listed in alphabetical order. We gratefully acknowledge financial support from the Scottish Economic Society on the pilot study and from the ESRC (Grant ES/R01163X/1). We also extend our thanks to Matthew McGinty, Christine Spencer and participants at the 2020 EALE/SOLE/AASLE World Conference, 2021 GLO Research Seminars, 2021 SES Conference, 2021 ICBM Conference, the Economics Centre at Curtin University, the Economics Department at St Lawrence University and the Applied Health Psychology Research Workshop and Business School at the University of Aberdeen who provided thoughtful comments on an early draft of the current manuscript. Institutional Review Board (IRB) approval was obtained from the University of Aberdeen, College of Life Sciences & Medicine Ethics Review Board (CERB/2015/5/1198). The study was pre-registered with the Open Science Framework ( https://osf.io/sxkb2 ) prior to data collection.

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JO - Journal of Economic Behavior and Organization

JF - Journal of Economic Behavior and Organization

ER -

Employment Contracts and Stress: Experimental Evidence

Abstract

Bibliographical note

Data Availability Statement

Keywords

UN SDGs

Access to Document

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Cite this