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 or not one's spouse earns performance pay. This implies that the distribution of family income will be less equitable than that of individual income as sorting concentrates the performance pay return among households with higher pay.
- performance pay
- assortative matching
ASJC Scopus subject areas
- Economics and Econometrics
- Sociology and Political Science