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First we discuss how extrinsic incentives may come into conflict with other motivations. For example, monetary incentives from principals may change how tasks are perceived by agents, with negative effects on behavior. In other cases, incentives might have the desired effects in the short term, but they still weaken intrinsic motivations. To put it in concrete terms, an incentive for a child to learn to read might achieve that goal in the short term, but then be counterproductive as an incentive for students to enjoy reading and seek it out over their lifetimes. Next we examine the research literature on three important examples in which monetary incentives have been used in a nonemployment context to foster the desired behavior: education; increasing contributions to public goods; and helping people change their lifestyles, particularly with regard to smoking and exercise. The conclusion sums up some lessons on when extrinsic incentives are more or less likely to alter such behaviors in the desired directions. [PUBLICATION ABSTRACT]

Internal competition may motivate worker effort, yet the benefits of competition may depend critically on workers’ relative abilities: large skill differences may reduce efforts. I use panel data from professional golf tournaments and find that the presence of a superstar is associated with lower performance. On average, golfers’ first-round scores are approximately 0.2 strokes worse when Tiger Woods participates relative to when Woods is absent. The overall tournament effect is 0.8 strokes. The adverse superstar effect varies with the quality of Woods’s play. There is no evidence that reduced performance is attributable to media attention intensity or risky strategy adoption.

This paper estimates social effects of incentivizing people in teams. In three field experiments featuring exogenous team formation and opportunities for repeated social interactions, we find large team effects that operate through social channels. In particular, assignment to a team treatment increases productivity by 9%–17% relative to an individual incentive treatment, even though the individual incentive yields a higher private return. Further, we find that in a choice treatment individuals overwhelmingly prefer the individual incentive to the team incentive, despite the latter being more effective. These results are most consistent with the team effects operating through guilt or social pressure as opposed to pure altruism.

Teacher contracts that condition pay and retention on demonstrated performance can improve selection into and out of teaching. I study alternative contracts in a simulated teacher labor market that incorporates dynamic self-selection and Bayesian learning. Bonus policies create only modest incentives and thus have small effects on selection. Reductions in tenure rates can have larger effects, but must be accompanied by substantial salary increases; elimination of tenure confers little additional benefit unless firing rates are extremely high. Benefits of both bonus and tenure policies exceed costs, though optimal policies are sensitive to labor market parameters about which little is known.

In this study, we use the lens of social exchange theory to investigate the influence of incentives on supplier performance under various conditions of buyer–supplier dependence. We propose that incentives generally fall into two main categories: competitive, market‐based incentives that reward suppliers based on how well they perform relative to other suppliers, and cooperative incentives, where both buyer and supplier share benefits based on their joint performance. Using empirical data collected from 230 buyers in a sample of U.S. industrial firms, we measure the effects of these two types of incentives on various measures of performance, as well as the moderating effects of buyer–supplier dependence. Our results suggest that competitive incentives can be an effective approach to improving delivery, quality, innovation and flexibility, for purchases where the buyer–supplier relationship is characterized by balanced and moderate amounts of mutual dependence. However, competitive incentives are ineffective at generating improved cost performance. Cooperation appears to be the only way to improve cost but is only fruitful under conditions of high mutual dependence. In general, we find that high mutual dependence provides a good basis for cooperative incentives to successfully improve each of the types of performance included in our study. Finally, we find evidence that cooperation and competition can coexist without significant risk of decreased performance.

This paper reviews the role of locus of control in the labor market. I begin with a discussion of the conceptual origins of locus of control, including its relationship to related concepts such as self-efficacy, motivation, and self-control. The relationship between locus of control and labor market success is then summarized. In doing so, I pay careful attention to what we know about three potential mechanisms - human capital investments, hiring decisions, and optimal incentive contracts - through which locus of control might operate. Finally, the broader implications of these relationships for public policy and future research are discussed.

This article explores some effects of the “impact agenda” on early academic careers and knowledge production. The impact agenda is the incentivisation of socio‐economic impact in university‐based research through research funding and evaluation mechanisms, producing, it has been theorised, new modalities of scholarly distinction (Watermeyer & Chubb, 2019). The latter risk aligning with traditionally individualistic forms of academic performativity (Chubb & Derrick, 2020), thus perpetuating existing inequality regimes (Davies et al., 2020) through posing additional obstacles to success for traditionally marginalised groups in academic hierarchies. Within the UK context, where the impact agenda is strongly institutionalised, we examine the delivery of highly rated impact by early career researchers and its effect on their work and careers. Specifically, we interrogate the potential for the (e)valuation of impact to democratise knowledge production and access to, and progression in, academic careers. Our article reports on the documentary discourse analysis of the highest‐rated “impact case studies” in the UK’s recent research evaluation exercise and interviews with some of their early career researcher (co)authors. The findings of this exploratory work suggest that while the impact agenda has started to incentivise and reward knowledge co‐production and a broader set of research skills, motivations, and pathways, there is a risk that this tendency co‐exists with, rather than challenges, established forms of “scholarly distinction” embodied in publishing productivity and funding capture, potentially leading to skill and talent loss.

\"We use the principal-agent model as a focal theoretical frame for synthesizing what we know, both theoretically and empirically, about the design and dynamics of the implementation of performance management systems in the public sector. In this context, we review the growing body of evidence about how performance measurement and incentive systems function in practice and how individuals and organizations respond and adapt to them over time, drawing primarily on examples from performance measurement systems in public education and social welfare programs. We also describe a dynamic framework for performance measurement systems that takes into account strategic behavior of individuals over time, learning about production functions and individual responses, accountability pressures, and the use of information about the relationship of measured performance to value added. Implications are discussed and recommendations derived for improving public sector performance measurement systems.\" (Author's abstract, IAB-Doku). Forschungsmethode: deskriptive Studie.

We examine whether students respond to immediate financial incentives when choosing their college major. From 2006–2007 to 2010–2011, low-income students in technical or foreign language majors could receive up to $8,000 in SMART Grants. Since income-eligibility was determined using a strict threshold, we determine the causal impact of this grant on student major with a regression discontinuity design. Using administrative data from public universities in Texas, we determine that income-eligible students were 3.2 percentage points more likely than their ineligible peers to major in targeted fields. We measure a larger impact of 10.2 percentage points at Brigham Young University.

Both the healthcare and education sector suffer from considerable staff shortages. In the healthcare sector, shortages are particularly prominent for nurses, while the education sector experiences significant teacher shortages. In this systematic literature review, we examine the effectiveness of interventions and policies to reduce staff shortages in healthcare and education in high-income countries. We focus our analysis on studies that apply research designs that allow for causal inference to inform policymakers about the effectiveness of interventions. In total, we include 85 studies that meet our inclusion criteria. Out of these studies, 71 studies focus on teachers and 14 on nurses, and 72 of the retrieved studies were conducted in the US. The majority of studies examine the impact of financial incentives and a large share of these studies report positive effects on teacher employment. Moreover, different types of interventions that invest in workers’ human capital show predominantly positive effects on employment. Interventions that equip nurses with skills to better cope with the stressors of their profession seem to be particularly effective. The same holds for policies that increase the scope of practice for nurses. Finally, effective school leaders are better capable of retaining (high-quality) teachers.