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Employment contracts and stress: experimental evidence

Employment contracts and stress: experimental evidence
Employment contracts and stress: experimental evidence
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.
0167-2681
360-373
Allan, Julia
0a1de00d-dfa3-4239-84e9-2e14c1c6aa29
Andelic, Nicole
271abdfa-45f1-4377-815d-7842b04d8d4c
Bender, Keith
bf2fe2c8-132e-48dc-90e6-804a5650cc44
Powell, Daniel
e1e53a46-a37b-425b-ac15-e82f99033f46
Stoffel, Sandro
19851ad9-7edf-41b4-b62a-82f3b7b820dd
Theodossiou, Ioannis
350adfea-5311-4f53-842a-e7bf0823f479
Allan, Julia
0a1de00d-dfa3-4239-84e9-2e14c1c6aa29
Andelic, Nicole
271abdfa-45f1-4377-815d-7842b04d8d4c
Bender, Keith
bf2fe2c8-132e-48dc-90e6-804a5650cc44
Powell, Daniel
e1e53a46-a37b-425b-ac15-e82f99033f46
Stoffel, Sandro
19851ad9-7edf-41b4-b62a-82f3b7b820dd
Theodossiou, Ioannis
350adfea-5311-4f53-842a-e7bf0823f479

Allan, Julia, Andelic, Nicole, Bender, Keith, Powell, Daniel, Stoffel, Sandro and Theodossiou, Ioannis (2021) Employment contracts and stress: experimental evidence. Journal of Economic Behavior and Organization, 187, 360-373. (doi:10.1016/j.jebo.2021.04.015).

Record type: Article

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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Published date: 31 July 2021
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Identifiers

Local EPrints ID: 510884
URI: http://eprints.soton.ac.uk/id/eprint/510884
DOI: doi:10.1016/j.jebo.2021.04.015
ISSN: 0167-2681
PURE UUID: 4349b777-9e25-498e-b1d8-c2c62cd87dff
ORCID for Daniel Powell: ORCID iD orcid.org/0000-0003-4995-6057

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Date deposited: 23 Apr 2026 16:57
Last modified: 24 Apr 2026 02:23

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Contributors

Author: Julia Allan
Author: Nicole Andelic
Author: Keith Bender
Author: Daniel Powell ORCID iD
Author: Sandro Stoffel
Author: Ioannis Theodossiou

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