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69

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75

RepetitivenessVariety of Things

Worker Has SayLearn New Things

TeamworkSet Own Pace

0

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0.2

0.3

0.4

0.5

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0.9

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Figure 1: Average Characteristics by Pay Method - QES

RepetitivenessVariety of Things

Worker Has SayLearn New Things

TeamworkSet Own Pace

0

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Figure 2: Average Characteristics by Pay Method - QES

Autonomy Complete Task Variety of Tasks Friendships Deal With People

0

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Figure 3: Average Characteristics by Pay Method - NLSY

0 - 10%10% - 20%

20% - 30%30% - 40%

40% - 50%50% - 60%

60% - 70%70% - 80%

80% - 90%90% - 100%

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Figure 4: Share of Bonus in Total Labor Earning

Table 1Mean Sample Statistics

CPS QES PSID NLSY(January 1977)* (1973-77) (1984-1992) (1993 Wave Only) (1988-1990)

Schooling in Years 12.4 - 12.5 12.6 12.4(2.88) (2.88) (2.90) (2.28)

Proportion with High School Diploma - 0.81 - - -(0.40)

Experience in Years 23.9 22.9 17.9 18.3 8.1(14.32) (12.16) (9.92) (8.88) (2.44)

Proportion Non-White 0.11 0.09 - - 0.26(0.31) (0.28) (0.44)

Proportion Female 0.43 0.30 - - 0.44(0.50) (0.46) (0.50)

Union Coverage 0.28 0.31 0.18 0.18 0.15(0.45) (0.46) (0.38) (0.39) (0.36)

Proportion Paid

Hourly 0.586 0.41 0.50 0.49 0.46(0.50) (0.49) (0.49) (0.50) (0.50)

Salary 0.38 0.51 0.42 0.44 0.54(0.48) (0.50) (0.50) (0.50) (0.50)

Piece Rates 0.01 0.03 0.01 0.01 0.04(0.10) (0.16) (0.09) (0.08) (0.19)

Commissions 0.03 0.05 0.07 0.06 0.06(0.17) (0.22) (0.26) (0.26) (0.23)

Bonuses 0.08 - 0.11 0.11 0.14(0.30) (0.32) (0.31) (0.35)

Average amount of bonuses ($1979)**

For Hourly Paid Workers 1079.09 - 1092.49 719.34 -(1920.24) (2664.13) (945.53)

For Salaried Workers 2313.05 - 4130.55 4981.23 -(5237.76) (8896.76) (12854.26)

Sample Size 4905 724 13785 1409 8165

Notes. *Computed from workers’ responses. **Conditional on amount being positive.

Table 2AAverage Job Characteristics by Occupation

Quality of Employment Survey

Variety Worker Learn SetOccupation Repetitiveness of Things Has Say New Things Teamwork Own Pace

Prof., tech, except eng. techn. 51.6% 94.8% 92.3% 95.8% 57.8% 75.8%Engineering and science techn. 58.4% 80.7% 52.9% 94.6% 82.5% 88.4%Writers, artists, etc. 28.0% 96.1% 96.1% 96.1% 58.4% 58.4%Managers and admin. except farm 60.5% 97.7% 93.2% 94.5% 41.3% 84.4%Sales workers 59.3% 79.7% 85.9% 92.0% 42.4% 77.1%Clerical and unskilled 1* 74.9% 75.5% 65.0% 80.8% 67.1% 86.9%Office machine operators 83.9% 75.8% 48.7% 86.6% 62.6% 62.6%Secretaries 64.1% 88.7% 49.3% 78.9% 76.4% 71.6%Clerical and unskilled 2** 81.1% 82.0% 48.8% 76.5% 69.3% 71.7%Craftsmen and kindred 1*** 65.5% 83.4% 68.8% 87.7% 69.2% 79.7%Mechanics and repairmen 63.2% 85.3% 68.1% 84.7% 48.9% 79.1%Operatives exc. precis. machines & t 77.4% 52.7% 45.3% 56.0% 66.0% 54.5%Precision machine operatives 84.1% 53.7% 51.9% 48.3% 56.4% 62.6%Textile operators 77.5% 52.6% 40.2% 56.4% 56.3% 63.7%Transport equip. operatives 86.8% 62.0% 48.5% 60.9% 52.8% 81.9%Laborers, except farm 97.6% 85.4% 46.1% 56.9% 76.4% 90.7%Cleaning service workers 79.6% 88.1% 76.7% 73.9% 28.7% 78.9%Food service workers 89.1% 76.4% 52.5% 62.1% 64.9% 76.7%Health service workers 76.6% 67.7% 41.2% 91.3% 54.6% 54.6%Personal service workers 68.8% 80.1% 66.5% 83.4% 44.3% 76.7%

Table 2BAverage Job Characteristics by Occupation

National Longitudinal Survey of Youth

Complete Variety DealOccupation Autonomy Task of Tasks Friendships With People

Prof., tech, except eng. techn. 57.36% 73.81% 55.41% 56.93% 76.41%Engineering and science techn. 61.59% 78.81% 56.95% 58.28% 65.56%Writers, artists, etc. 67.68% 76.77% 54.55% 65.66% 73.74%Managers and admin. except farm 61.13% 77.48% 64.61% 56.84% 90.08%Sales workers 42.08% 63.34% 30.67% 55.92% 84.02%Clerical and unskilled 1* 32.77% 65.88% 30.67% 49.87% 72.79%Office machine operators 39.75% 62.46% 38.80% 48.90% 59.62%Secretaries 44.95% 73.70% 51.07% 54.74% 72.48%Clerical and unskilled 2** 39.13% 67.69% 37.02% 49.47% 63.69%Craftsmen and kindred 1*** 47.10% 71.65% 47.99% 56.03% 46.65%Mechanics and repairmen 48.48% 73.19% 48.96% 50.40% 52.49%Operatives exc. precis. machines & t 32.64% 57.46% 33.01% 48.29% 44.99%Precision machine operatives 28.92% 48.59% 26.51% 50.20% 33.33%Textile operators 31.73% 59.37% 33.21% 47.31% 33.21%Transport equip. operatives 40.25% 65.50% 33.25% 48.50% 62.25%Laborers, except farm 33.04% 62.73% 30.89% 48.44% 45.49%Cleaning service workers 34.93% 64.95% 27.34% 40.07% 33.65%Food service workers 28.26% 64.37% 22.19% 54.45% 70.57%Health service workers 37.99% 68.16% 39.94% 62.01% 82.12%Personal service workers 47.96% 66.19% 33.09% 58.03% 74.10%

* From bank tellers to meter readers for utilities (Census 301 to 334)**From shipping clerks to ticket agents and other misc clerks (Census 374 to 395)***From auto access. installers to machinist apprentices (Census 401 to 462)Celle entries represent the percentage of workers who consider theirjob as having the various features listed.

Table 3APay Method by Occupation

Quality of Employment Survey 1977

Occupation Hourly Salary Piece Rate Commission

Prof., tech, except eng. techn. 14.15% 83.02% 0.94% 1.89%Engineering and science techn. 28.57% 71.43% 0.00% 0.00%Writers, artists, etc. 0.00% 77.78% 0.00% 22.22%Managers and admin. except farm 8.33% 81.82% 2.27% 7.58%Sales workers 27.27% 9.09% 4.55% 59.09%Clerical and unskilled 1* 27.08% 64.58% 0.00% 8.33%Office machine operators 30.77% 69.23% 0.00% 0.00%Secretaries 17.65% 82.35% 0.00% 0.00%Clerical and unskilled 2** 46.15% 53.85% 0.00% 0.00%Craftsmen and kindred 1*** 59.02% 34.43% 4.92% 1.64%Mechanics and repairmen 80.65% 17.74% 0.00% 1.61%Operatives exc. precis. machines & text. 74.19% 22.58% 3.23% 0.00%Precision machine operatives 68.75% 12.50% 18.75% 0.00%Textile operators 92.31% 5.13% 2.56% 0.00%Transport equip. operatives 63.33% 16.67% 10.00% 10.00%Laborers, except farm 85.00% 15.00% 0.00% 0.00%Cleaning service workers 44.44% 44.44% 11.11% 0.00%Food service workers 80.00% 20.00% 0.00% 0.00%Health service workers 55.56% 44.44% 0.00% 0.00%Personal service workers 23.08% 61.54% 7.69% 7.69%

Table 3BPay Method by Occupation

National Longitudinal Survey of Youth 1988-90

Occupation Hourly Salary Piece Rate Commission Bonus Bonus1

Prof., tech, except eng. techn. 27.94% 72.06% 0.43% 1.99% 15.46% 29.22%Engineering and science techn. 42.37% 57.63% 0.00% 5.09% 9.32% 27.97%Writers, artists, etc. 21.84% 78.16% 2.30% 9.20% 17.24% 32.18%Managers and admin. except farm 19.98% 80.02% 0.68% 9.84% 28.46% 47.37%Sales workers 25.07% 74.94% 0.78% 37.98% 25.58% 36.95%Clerical and unskilled 1* 43.18% 56.83% 1.34% 3.12% 13.21% 29.53%Office machine operators 43.88% 56.12% 0.84% 1.27% 13.50% 28.27%Secretaries 37.20% 62.80% 1.02% 1.37% 11.60% 25.60%Clerical and unskilled 2** 48.76% 51.24% 1.99% 1.74% 10.20% 25.12%Craftsmen and kindred 1*** 60.32% 39.68% 2.67% 1.60% 10.68% 28.65%Mechanics and repairmen 53.16% 46.84% 4.54% 9.56% 9.89% 22.04%Operatives exc. precis. machines & text. 68.93% 31.07% 8.75% 1.79% 10.54% 17.86%Precision machine operatives 60.44% 39.56% 36.81% 1.10% 9.34% 19.78%Textile operators 66.67% 33.33% 9.76% 0.71% 11.43% 21.43%Transport equip. operatives 50.48% 49.52% 3.38% 8.21% 13.53% 23.67%Laborers, except farm 60.71% 39.29% 6.02% 1.88% 10.34% 23.50%Cleaning service workers 54.46% 45.55% 1.49% 0.50% 7.43% 17.33%Food service workers 52.46% 47.55% 0.52% 1.29% 7.49% 18.86%Health service workers 65.99% 34.01% 2.03% 0.51% 8.63% 18.27%Personal service workers 36.81% 63.19% 1.84% 20.25% 9.20% 19.02%

* From bank tellers to meter readers for utilities (Census 301 to 334)**From shipping clerks to ticket agents and other misc clerks (Census 374 to 395)***From auto access. installers to machinist apprentices (Census 401 to 462)Bonus1: includes promotions.

Table 4ASequential Estimation Results-QES 1977

Direct Use ofIndividual-Level Responses

Deterministic vs. Deterministic vs. Contractible vs. Contractible vs. Hourly vs. Hourly vs.Variable Stochastic Stochastic Non Contractible Non Contractible Piece Rates Piece Rates

(Deterministic=1) (Deterministic=1) (Contractible=1) (Contractible=1) (Piece Rate=1) (Piece Rate=1)

Job is repetitive 0.0653 0.0702 - - - -(0.0311) (0.0312)

Variety of things to do - - -0.0781 - -0.0494 -(0.0515) (0.0347)

Worker has a lot of say about -0.0932 - 0.0033 - 0.0406 -what happens on her/his job (0.0333) (0.0309) (0.0287)

Job makes workerlearn new things - -0.0736 - - - -

(0.0434)

Teamwork - - - -0.0247 - -0.0543(0.0259) (0.0289)

Worker Sets Own Pace - - - -0.0344 - 0.0136(0.0348) (0.0307)

Firm Size 0.0047 0.0066 -0.0190 -0.0197 0.0019 0.0006(0.0087) (0.0089) (0.0068) (0.0068) (0.0085) (0.0085)

Union 0.1345 0.1357 0.0180 0.0117 0.0151 0.0170(0.0348) (0.0348) (0.0325) (0.0324) (0.0303) (0.0304)

High School Diploma -0.1320 -0.1203 0.0105 0.0149 0.0108 0.0026(0.0410) (0.0410) (0.0425) (0.0424) (0.0320) (0.0319)

College Diploma -0.1129 -0.1194 0.0010 -0.0004 -0.0669 -0.0642(0.0521) (0.0523) (0.0337) (0.0337) (0.0830) (0.0829)

Female 0.0865 0.0947 -0.0284 -0.0273 -0.0196 -0.0319(0.0381) (0.0381) (0.0316) (0.0308) (0.0355) (0.0354)

Non-White 0.1279 0.1381 0.0028 0.0126 -0.0955 -0.0844(0.0542) (0.0544) (0.0573) (0.0568) (0.0414) (0.0416)

F-Test of No Selection(P-Value) 0.6706 0.6835 0.0289 0.0339 0.3421 0.2426

Sample Size 724 724 408 408 316 316

Notes. Standard errors are in parenthesis. These are adjusted for structural group effects where applicable.See text for details on the estimation procedure. Other covariates include industry dummies, tenure, experience,and occupation dummies for the estimation with individual-level responses.

Table 4BSequential Estimation Results-QES 1977

Individual-Level ResponsesInstrumented with Group Averages

Deterministic vs. Deterministic vs. Contractible vs. Contractible vs. Hourly vs. Hourly vs.Variable Stochastic Stochastic Non Contractible Non Contractible Piece Rates Piece Rates

(Deterministic=1) (Deterministic=1) (Contractible=1) (Contractible=1) (Piece Rate=1) (Piece Rate=1)

Job is repetitive 0.8776 0.9120 - - - -(0.2226) (0.2597)

Variety of things to do - - -0.3385 - -0.6801 -(0.3300) (0.4915)

Worker has a lot of say about -0.0697 - 0.5241 - 0.7393 -what happens on her/his job (0.2480) (0.2366) (0.3409)

Job makes workerlearn new things - 0.0008 - - - -

(0.2086)

Teamwork - - - -0.7037 - -0.4131(0.3760) (0.3847)

Worker Sets Own Pace - - - 0.6968 - 0.5024(0.2962) (0.3242)

Firm Size 0.0044 0.0042 -0.0150 -0.0224 0.0015 0.0015(0.0087) (0.0087) (0.0069) (0.0069) (0.0082) (0.0082)

Union 0.1342 0.1342 0.0133 0.0149 0.0206 0.0254(0.0354) (0.0354) (0.0335) (0.0333) (0.0291) (0.0291)

High School Diploma -0.1222 -0.1192 0.0281 0.0459 -0.0031 0.0037(0.0409) (0.0412) (0.0427) (0.0437) (0.0401) (0.0304)

College Diploma -0.1157 -0.1200 -0.0034 0.0041 -0.0546 -0.0459(0.0537) (0.0534) (0.0346) (0.0343) (0.0861) (0.0862)

Female 0.0905 0.0936 -0.0777 -0.0549 0.0031 0.0243(0.0382) (0.0384) (0.0297) (0.0308) (0.0346) (0.0348)

Non-White 0.1332 -0.1297 -0.0259 -0.0014 -0.0890 -0.1017(0.0540) (0.0543) (0.0559) (0.0572) (0.0394) (0.0396)

F-Test of No Selection(P-Value) 0.4077 0.3885 0.0203 0.0085 0.0694 0.0720

Sample Size 724 724 408 408 316 316

Table 4CSequential Estimation Results-QES 1977

Two-Step Linear Probability ModelUsing Group Averages Directly

Deterministic vs. Deterministic vs. Contractible vs. Contractible vs. Hourly vs. Hourly vs.Variable Stochastic Stochastic Non Contractible Non Contractible Piece Rates Piece Rates

(Deterministic=1) (Deterministic=1) (Contractible=1) (Contractible=1) (Piece Rate=1) (Piece Rate=1)

Job is repetitive 0.6011 0.1614 - - - -(0.4284) (0.4638)

Variety of things to do - - -0.9344 - -0.7898 -(0.4217) (0.2104)

Worker has a lot of say about -0.2743 - 0.7948 - 0.6565what happens on her/his job (0.3680) (0.3373) (0.1683) -

Job makes workerlearn new things - -0.7636 - - - -

(0.4657)

Teamwork - - - -0.4431 - -0.5160(0.3395) (0.1537)

Worker Sets Own Pace - - - 0.3008 - 0.1930(0.4384) (0.1985)

Firm Size 0.0042 0.0042 -0.0162 -0.0162 0.0011 0.0011(0.0086) (0.0086) (0.0069) (0.0069) (0.0084) (0.0084)

Union 0.1319 0.1319 -0.0178 -0.0178 0.0260 0.0260(0.0352) (0.0352) (0.0335) (0.0335) (0.0295) (0.0295)

High School Diploma -0.1169 -0.1169 0.1034 0.1034 0.0072 0.0072(0.0409) (0.0409) (0.0415) (0.0415) (0.0307) (0.0307)

College Diploma -0.1158 -0.1158 -0.0071 -0.0071 -0.0799 -0.0799(0.0538) (0.0538) (0.0350) (0.0350) (0.0884) (0.0884)

Female 0.0895 0.0895 -0.3750 -0.3750 -0.0171 -0.0171(0.0389) (0.0389) (0.0291) (0.0291) (0.0370) (0.0370)

Non-White 0.1288 0.1288 -0.0765 -0.0765 -0.0765 -0.0765(0.0544) (0.0544) (0.0522) (0.0522) (0.0400) (0.0400)

F-Test of No Selection(P-Value) 0.3863 0.3863 0.0008 0.0008 0.0559 0.0559

Sample Size 724 724 408 408 316 316

Table 5Sequential Estimation Results-QES 1973-1977

(Two-Step Linear Probability Model)With Correction for Misclassification Errors

Deterministic vs. Deterministic vs. Contractible vs. Contractible vs. Hourly vs. Hourly vs.Variable Stochastic Stochastic Non Contractible Non Contractible Piece Rates Piece Rates

(Deterministic=1) (Deterministic=1) (Contractible=1) (Contractible=1) (Piece Rate=1) (Piece Rate=1)

Job is repetitive 1.0533 0.5716 - - - -(0.4034) (0.3251)

Variety of things to do - - -0.5332 - - -0.2753(0.3649) (0.1446)

Worker has a lot of say about 0.0197 - 0.7243 - - 0.4054what happens on her/his job (0.3465) (0.2757) (0.1156)

Job makes workerlearn new things - -0.7930 - - - -

(0.3264)

Teamwork - - - -0.5054 -0.4101 -(0.2854) (0.0969)

Worker Sets Own Pace - - - 0.2861 0.2175 -(0.3480) (0.1251)

Sample Size 724 724 408 408 316 316

Notes. Adaptation in levels of the Krueger-Summers (1988) estimator. See Appendix 2 for description.

Table 6ASequential Estimation Results (Fixed-Effects)-NLSY 1988-1990

No Correction for Misclassification Errors.

Bonus+Salary vs.Deterministic vs. Contractible vs. Salary+Termin. Hourly vs.

Variable Stochastic Non-Contractible Contract Piece Rates(Deterministic=1) (Contractible=1) (Bonus-Salary=1) (Piece Rate=1)

Autonomy -1.38 1.5634 0.982 -0.1331(0.3250) (0.4433) (0.9165) (0.5382)

Complete Task 0.8653 -0.7975 0.3077 -1.4971(0.3835) (0.5231) (0.9044) (0.6352)

Variety 0.7249 -1.1221 -1.1146 0.9406(0.2895) (0.3949) (0.7175) (0.4795)

Friendships 0.9155 -0.3344 -0.3302 -0.5213(0.3703) (0.5052) (1.2908) (0.6105)

Deal with People -0.7779 0.2367 0.1426 -0.0435(0.1160) (0.1582) (0.2593) (0.1921)

Unemployment Rate 0.0149 0.0037 -0.0774 0.0303in Local Labor Market (0.0112) (0.0079) (0.0161) (0.0087)

Unemployment Rate - - -0.0299in Industry (0.0225)Schooling -0.0193 0.0014 -0.0104 -0.0031

(0.0150) (0.0163) (0.0316) (0.0086)Union 0.0034 0.0075 -0.0807 -0.0042

(0.0188) (0.0166) (0.0336) (0.0122)

F-Test of No Selection(P-Value) 0.0066 0.2599 0.7084 0.0878

Sample Size 8165 4238 3832 3927

Notes. Standard errors are in parenthesis. These are adjusted for structural group effects where applicable (except *). See text for details on the estimation procedure. Other covariates include tenure, labor market experience, and dummies for region, industry, year, residence in smsa, and increase in reponsibility.

Table 6BSequential Estimation Results (Fixed-Effects)-NLSY 1988-1990

With Correction for Misclassification Errors.

Deterministic vs. Contractible vs. Hourly vs. Variable Stochastic Non-Contractible Piece Rates

(Deterministic=1) (Contractible=1) (Piece Rate=1)

Autonomy -1.2188 2.2259 -0.1835(0.5707) (0.5464) (0.3536)

Complete Task -0.5984 -1.2647 -1.4102(0.6225) (0.5960) (0.4173)

Variety 0.8995 -1.156 0.6816(0.4627) (0.4429) (0.3451)

Friendships 0.8156 -0.5861 -0.0419(0.7096) (0.6794) (0.4029)

Deal with People -0.476 0.1735 0.0611(0.3582) (0.3429) (0.1262)

Sample Size 8165 4238 3927

Notes. Method used is Krueger-Summers (1988)’s estimator. See Appendix 2 for description.

Table 7ASequential Estimation Results (Fixed-Effects)-PSID 1984-1992.

No Correction for Misclassification Errors

Deterministic vs. Deterministic vs. Contractible vs. Contractible vs. Hourly vs. Hourly vs. Variable Stochastic Stochastic Non-Contractible Non-Contractible Piece Rates Piece Rates

(Deterministic=1) (Deterministic=1) (Contractible=1) (Contractible=1) (Piece Rates=1) (Piece Rates=1)

Job is repetitive -0.0133 0.2982 - - - -(0.2538) (0.3046)

Variety of things to do - - - -1.1236 - -0.4388(0.4519) (0.2872)

Worker has a lot of say about -0.6004 - - 0.6911 - 0.4025what happens on her/his job (0.2192) (0.3166) (0.2172)

Job makes worker -0.2820learn new things - (0.3073) - - - -

Teamwork - - -0.4118 - -0.2354 -(0.3392) (0.2143)

Worker Sets Own Pace - - 0.5203 - 0.0496 -(0.4374) (0.2512)

Unemployment Rate* -0.0068 -0.0068 -0.0025 -0.0025 -0.0002 -0.0002in Local Labor Market (0.0058) (0.0058) (0.0047) (0.0047) (0.0018) (0.0018)

U. Rate in Local Labor - - - - - -Market Squared.

Unemployment Rate - - - - - -in Industry

U. Rate in Industry - - - - - -Squared.

Union 0.1490 0.1490 -0.0036 -0.0036 0.0016 0.0016(0.0111) (0.0111) (0.0237) (0.0237) (0.0044) (0.0044)

F-Test of No Selection(P-Value) 0.1656 0.1656 0.7831 0.7831 0.4631 0.4631

Sample Size 13785 13785 6842 6842 6943 6943

Notes. Standard errors are in parenthesis. These are adjusted for structural group effects where applicable(except *). See text for details on the estimation procedure. Other covariates include tenure, labor market experience, schooling, and dummies for region, industry and year. **Observations for which the bonus measure is negative were deleted.The actual values of the local unemployment rate are used in the last column whereas bracketed values are used in the next to last columnto make it comparable to the local unemployment rates contained in the NLSY.

Table 7BSequential Estimation Results (Fixed-Effects)-PSID 1984-1992.

With Correction for Misclassification Errors.

Deterministic vs. Deterministic vs. Contractible vs. Contractible vs. Hourly vs. Hourly vs. Variable Stochastic Stochastic Non-Contractible Non-Contractible Piece Rates Piece Rates

(Deterministic=1) (Deterministic=1) (Contractible=1) (Contractible=1) (Piece Rates=1) (Piece Rates=1)

Job is repetitive 0.4851 0.2032 - - - -(0.4954) (0.4337)

Variety of things to do - - - -0.6451 - -0.4001(0.4876) (0.3168)

Worker has a lot of say about -0.7303 - - 0.5861 - 0.4716what happens on her/his job (0.4259) (0.3688) (0.2396)

Job makes workerlearn new things - -1.3072 - - - -

(0.4367)

Teamwork - - -0.1229 - -0.3545 -(0.3878) (0.2534)

Worker Sets Own Pace - - 0.1512 - 0.1320 -(0.4581) (0.2994)

Sample Size 13785 13785 6842 6842 6943 6943

Notes. Method used is Krueger-Summers (1988)’s estimator. See Appendix 2 for description.

Table 7CTobit Analysis of Determinants of Bonus Pay

Panel Study of Income Dynamics (1976-1992) $1979(Standard Errors in Parenthesis)

Variable Full 1976-92 Sample Manufacturing Sector Subsample

Standard Tobit Fixed-Effect Tobit Standard Tobit Fixed-Effect Tobit

Local Unemployment Rate -300.07 -411.78 -949.4 -567.58 -515.06 -3251.1 -3230.1(67.83) (67.48) (394.2) (109.31) (107.73) (1372.0) (1579.0)

Industry Unemployment 27.98 - -407.3 - - - -Rate (1-Digit) (152.77) - (566.8) - - - -

3-digit Industry Profits* - - - 87.28 - 136.8 -(22.48) - (112.3) -

1-digit Industry Dummies - Yes - - -

Schooling 114.97 52.21 - -82.47 -75.55 - -(34.33) (33.24) (58.52) (58.80) - -

Union -3478.95 -3580.4 1311 -3550.82 -3268.99 -13680.1 -12690(437.58) (442.68) (3810.0) (723.96) (714.27) (6931.0) (7138)

Potential Experience -19.09 -37.12 50.29 -31.73 -29.28 -538.2 -416.2(14.09) (13.99) (145.6) (22.69) (22.66) (515.5) (515.9)

Live in a SMSA 1192.25 866.03 5535 446.95 624.09 2117 1909(296.74) (294.47) (4131.0) (496.40) (494.07) (4322.0) (4639.0)

Industry Dummies Yes - Yes - - - -

Log Likelihood -24737.2 -24485.5 - -4483.8 -4491.3 - -

N 18384 18384 18384 3904 3904 3904 3904

Notes. Workers paid commissions and those working overtime are excluded from the analysis. Additional regressors include time and occupation dummies, as well as a dummy for being married. *2-digits for the years1976-1980 due to the PSID’s recording of 2-digit industry only. Profits are computed using the NBER ProductivityDatabase. The following formula is used: profit=(vadd-pay)/cpi -(invest/piinv + cap - lcap)/cpi where vadd=value added; pay=labor costs; invest=investment; piinv=investment deflator; cap-lcap=depreciation. The 4-digit SIC industry codescontained in the dataset are converted to Census 1970 3 digit codes.

Table 8ASequential Estimation Results (Linear Probability Model)-CPS 1977. Workers’ Responses

No Correction for Misclasssification Errors.

Bonus+Salary vs.Deterministic vs. Deterministic vs. Contractible vs. Contractible vs. Hourly vs. Hourly vs. Salary+Termin.

Stochastic Stochastic Non-Contractible Non-Contractible Piece Rates Piece Rates ContractVariable (Deterministic=1) (Deterministic=1) (Contractible=1) (Contractible=1) (Piece Rates=1) (Piece Rates=1) (Bonus-Salary=1)

Job is repetitive 0.3859 0.5177 - - - - -(0.3572) (0.2893)

Variety of things to do - - - -0.7905 - -0.3956 -(0.4560) (0.2109)

Worker has a lot of say about -0.7361 - - 0.6634 - 0.352 -what happens on her/his job (0.3091) (0.3431) (0.1593)

Job makes workerlearn new things - -0.7827 - - - - -

(0.2888)

Teamwork - - -0.4646 - -0.2017 - -(0.3280) (0.1854)

Worker Sets Own Pace - - 0.2376 - -0.0225 - -(0.3810) (0.2153)

Unemployment Rate - - - - -0.0046in Industry (0.0019)

Schooling -0.0002 -0.0002 0.0021 0.0021 -0.0008 -0.0008 -0.0048(0.0019) (0.0019) (0.0015) (0.0015) (0.0011) (0.0011) (0.0089)

Union 0.1048 0.1048 -0.0112 -0.0112 -0.0152 -0.0152 0.0231(0.0151) (0.0151) (0.0151) (0.0151) (0.0057) (0.0057) (0.00181)

Non-White 0.0916 0.0916 -0.0071 -0.0071 0.0086 0.0086 -0.0205(0.0179) (0.0179) (0.0157) (0.0157) (0.0071) (0.0071) (0.0177)

Female 0.1556 0.1556 -0.0215 -0.0215 0.0146 0.0146 -0.0347(0.0142) (0.0142) (0.0116) (0.0116) (0.0060) (0.0060) (0.0170)

Sample Size 4905 4905 1982 1982 2923 2923 1307

Notes. Standard errors are in parenthesis. These are adjusted for structural group effects where applicable.See text for details on the estimation procedure. Other covariates include potential experience, and dummies for industry.

Table 8BSequential Estimation Results (Linear Probability Model)-CPS 1977. Workers’ Responses

With Correction for Misclasssification Errors.

Deterministic vs. Deterministic vs. Contractible vs. Contractible vs. Hourly vs. Hourly vs. Variable Stochastic Stochastic Non-Contractible Non-Contractible Piece Rates Piece Rates

(Deterministic=1) (Deterministic=1) (Contractible=1) (Contractible=1) (Piece Rates=1) (Piece Rates=1)

Job is repetitive 0.5815 0.2399 - - - -(0.3113) (0.2805)

Variety of things to do - - - -0.3961 - -0.4048(0.3187) (0.1862)

Worker has a lot of say about -0.4051 - - 0.4974 - 0.3545what happens on her/his job (0.2845) (0.2407) (0.1407)

Job makes workerlearn new things - -0.9718 - - - -

(0.2817)

Teamwork - - -0.3818 - -0.2024 -(0.2385) (0.1507)

Worker Sets Own Pace - - 0.2729 - -0.0356 -(0.2907) (0.1837)

Notes. Adaptation in levels of the Krueger-Summers (1988) estimator. See Appendix 2 for description.

Table 9ASequential Estimation Results (Linear Probability Model)-CPS 1977, Employers’ Responses

No Correction for Misclasssification Errors.

Bonus+Salary vs.Deterministic vs. Deterministic vs. Contractible vs. Contractible vs. Hourly vs. Hourly vs. Salary+Termin.

Stochastic Stochastic Non-Contractible Non-Contractible Piece Rates Piece Rates ContractVariable (Deterministic=1) (Deterministic=1) (Contractible=1) (Contractible=1) (Piece Rates=1) (Piece Rates=1) (Bonus-Salary=1)

Job is repetitive 0.5849 0.3226 - - - - -(0.3628) (0.2837)

Variety of things to do - - - -0.6584 - -0.2616 -(0.4297) (0.1130)

Worker has a lot of say about -0.4411 - - 0.3642 - 0.1112 -what happens on her/his job (0.3180) (0.3228) (0.0848)

Job makes workerlearn new things - -0.8828 - - - - -

(0.2860)

Teamwork - - -0.1956 - -0.007 - -(0.3009) (0.0901)

Worker Sets Own Pace - - 0.2808 - -0.1215 - -(0.3533) (0.1058)

Unemployment Rate - - - - -0.0154in Industry (0.0059)

Schooling 0.0001 0.0001 0.0022 0.0022 -0.0024 -0.0024 -0.0052(0.0020) (0.0020) (0.0021) (0.0021) (0.0010) (0.0010) (0.0098)

Union 0.0891 0.0891 -0.0302 -0.0302 -0.0054 -0.0054 0.0442(0.0156) (0.0156) (0.0198) (0.0198) (0.0068) (0.0068) (0.0294)

Non-White 0.0841 0.0841 0.0025 0.0025 -0.0178 -0.0178 -0.0066(0.0194) (0.0194) (0.0226) (0.0226) (0.0085) (0.0085) (0.0189)

Female 0.1535 0.1535 -0.0326 -0.0326 0.0102 0.0102 -0.0286(0.0150) (0.0150) (0.0165) (0.0165) (0.0072) (0.0072) (0.0192)

Sample Size 4495 4495 1868 1868 2627 2627 1404

Notes. Standard errors are in parenthesis. These are adjusted for structural group effects where applicable.See text for details on the estimation procedure. Other covariates include potential experience, and dummies for industry.

Table 9BSequential Estimation Results (Linear Probability Model)-CPS 1977, Employers’ Responses

With Correction for Misclassification Errors.

Deterministic vs. Deterministic vs. Contractible vs. Contractible vs. Hourly vs. Hourly vs. Variable Stochastic Stochastic Non-Contractible Non-Contractible Piece Rates Piece Rates

(Deterministic=1) (Deterministic=1) (Contractible=1) (Contractible=1) (Piece Rates=1) (Piece Rates=1)

Job is repetitive 0.7566 0.3091 - - - -(0.3388) (0.2702)

Variety of things to do - - - -0.3027 - -0.271(0.3217) (0.0894)

Worker has a lot of say about -0.0572 - - 0.2711 - 0.0963what happens on her/his job (0.2948) (0.2429) (0.0675)

Job makes workerlearn new things - -0.7584 - - - -

(0.2739)

Teamwork - - -0.1952 - -0.0208 -(0.2333) (0.0745)

Worker Sets Own Pace - - 0.3361 - -0.0802 -(0.2878) (0.0919)

Notes. Adaptation in levels of the Krueger-Summers (1988) estimator. See Appendix 2 for description.

Table 10Test of Independence of Irrelevant Alternatives Assumption

Chi-Square Statistic[Degrees of Freedom]

(P-Value)

QES NLSY PSID CPS

Full Choice Set vs. 14.23* 15.05** 82.47* 10.36*Excluding Deterministic [16] [28] [29] [12]Alternatives (0.5814) (0.9778) (0.0000) (0.5841)

Stochastic Choice - 8.68** 2.26* 4.57**Set vs. Excluding Commissions [28] [29] [12]

(0.9998) (0.9999) (0.9708)

Notes. *Hausman Test Statistic. **Small-Hsiao Test Statistic(used when Hausman statistic is negative).

Table 11: Cost of a State Contingent Contract

Number of CostPerformance Levels 2 5 10 15

2 $0.16 $10 $10,000 $10 million3 $0.18 $600 $35 million $2 trillion4 $2.56 $10,000 $11 billion $11,000 trillion5 $6.25 $100,000 $1000 billion $10 million trillion

Cost of Contract Clause 1 cent

Table 12: Cross-Tabulation of Employer and Employee Reports of OccupationPanel A: January 1977 CPS-Number of Cases

Employer Report (same categories)

# Observations-Employer Report Total601 89 49 418 274 336 83 163 294 243 290 255 112 212 158 263 195 209 123 128 4495

Employee Report #Observations-Employee Report

Prof., tech, except eng. techn. 528 15 3 34 5 18 0 2 10 4 2 1 0 1 0 0 1 0 14 6 644Engineering and science techn. 6 48 2 3 0 0 0 0 1 1 2 0 0 0 0 0 0 0 0 1 64Writers, artists, etc. 5 2 36 5 0 1 0 0 1 1 0 0 0 0 0 0 0 0 0 1 52Managers and admin. except farm 32 5 0 291 10 18 1 4 9 17 10 1 0 0 1 1 1 5 0 7 413Sales workers 4 0 2 14 217 9 1 0 3 1 2 0 0 1 1 7 1 1 0 0 264Clerical and unskilled 1* 5 0 1 15 15 238 9 11 45 1 1 2 0 1 0 3 1 8 0 0 356Office machine operators 2 1 1 2 0 10 58 5 10 1 0 1 0 1 0 0 0 1 3 0 96Secretaries 1 0 0 5 3 7 7 120 54 0 0 1 0 1 0 0 0 0 0 0 199Clerical and unskilled 2** 3 1 0 9 6 26 5 17 136 2 1 4 0 2 2 13 2 0 0 3 232Craftsmen and kindred 1*** 2 3 2 17 3 1 1 1 2 174 17 12 5 14 5 23 5 1 0 1 289Mechanics and repairmen 1 5 1 6 2 1 0 0 4 19 214 10 2 16 2 19 9 1 0 1 313Operatives exc. precis. machines & text. 1 5 0 2 3 2 0 0 3 5 9 162 7 28 2 11 5 0 0 0 245Precision machine operatives 0 1 0 0 0 0 0 0 0 3 3 11 86 10 0 3 1 0 0 0 118Textile operators 0 0 1 1 0 0 1 0 0 4 19 34 8 115 1 21 0 0 0 0 205Transport equip. operatives 0 1 0 3 2 0 0 0 0 2 2 2 1 2 138 14 0 0 1 0 168Laborers, except farm 0 1 0 3 5 1 0 0 11 7 4 12 1 17 6 137 9 1 0 0 215Cleaning service workers 0 1 0 1 2 1 0 1 1 0 3 0 1 3 0 4 157 3 2 4 184Food service workers 0 0 0 4 1 3 0 0 0 1 1 0 1 0 0 3 1 186 4 2 207Health service workers 10 0 0 0 0 0 0 2 0 0 0 1 0 0 0 1 0 1 97 1 113Personal service workers 1 0 0 3 0 0 0 0 4 0 0 1 0 0 0 3 2 1 2 101 118

Table 12: Cross-Tabulation of Employer and Employee Reports of OccupationPanel B: January 1977 CPS-Percent of Number of Employee Reports

Employer Report (same categories)

Employee Report

Prof., tech, except eng. techn. 0.820 0.023 0.005 0.053 0.008 0.028 0.000 0.003 0.016 0.006 0.003 0.002 0.000 0.002 0.000 0.000 0.002 0.000 0.022 0.009Engineering and science techn. 0.094 0.750 0.031 0.047 0.000 0.000 0.000 0.000 0.016 0.016 0.031 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.016Writers, artists, etc. 0.096 0.038 0.692 0.096 0.000 0.019 0.000 0.000 0.019 0.019 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.019Managers and admin. except farm 0.077 0.012 0.000 0.705 0.024 0.044 0.002 0.010 0.022 0.041 0.024 0.002 0.000 0.000 0.002 0.002 0.002 0.012 0.000 0.017Sales workers 0.015 0.000 0.008 0.053 0.822 0.034 0.004 0.000 0.011 0.004 0.008 0.000 0.000 0.004 0.004 0.027 0.004 0.004 0.000 0.000Clerical and unskilled 1* 0.014 0.000 0.003 0.042 0.042 0.669 0.025 0.031 0.126 0.003 0.003 0.006 0.000 0.003 0.000 0.008 0.003 0.022 0.000 0.000Office machine operators 0.021 0.010 0.010 0.021 0.000 0.104 0.604 0.052 0.104 0.010 0.000 0.010 0.000 0.010 0.000 0.000 0.000 0.010 0.031 0.000Secretaries 0.005 0.000 0.000 0.025 0.015 0.035 0.035 0.603 0.271 0.000 0.000 0.005 0.000 0.005 0.000 0.000 0.000 0.000 0.000 0.000Clerical and unskilled 2** 0.013 0.004 0.000 0.039 0.026 0.112 0.022 0.073 0.586 0.009 0.004 0.017 0.000 0.009 0.009 0.056 0.009 0.000 0.000 0.013Craftsmen and kindred 1*** 0.007 0.010 0.007 0.059 0.010 0.003 0.003 0.003 0.007 0.602 0.059 0.042 0.017 0.048 0.017 0.080 0.017 0.003 0.000 0.003Mechanics and repairmen 0.003 0.016 0.003 0.019 0.006 0.003 0.000 0.000 0.013 0.061 0.684 0.032 0.006 0.051 0.006 0.061 0.029 0.003 0.000 0.003Operatives exc. precis. machines & text. 0.004 0.020 0.000 0.008 0.012 0.008 0.000 0.000 0.012 0.020 0.037 0.661 0.029 0.114 0.008 0.045 0.020 0.000 0.000 0.000Precision machine operatives 0.000 0.008 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.025 0.025 0.093 0.729 0.085 0.000 0.025 0.008 0.000 0.000 0.000Textile operators 0.000 0.000 0.005 0.005 0.000 0.000 0.005 0.000 0.000 0.020 0.093 0.166 0.039 0.561 0.005 0.102 0.000 0.000 0.000 0.000Transport equip. operatives 0.000 0.006 0.000 0.018 0.012 0.000 0.000 0.000 0.000 0.012 0.012 0.012 0.006 0.012 0.821 0.083 0.000 0.000 0.006 0.000Laborers, except farm 0.000 0.005 0.000 0.014 0.023 0.005 0.000 0.000 0.051 0.033 0.019 0.056 0.005 0.079 0.028 0.637 0.042 0.005 0.000 0.000Cleaning service workers 0.000 0.005 0.000 0.005 0.011 0.005 0.000 0.005 0.005 0.000 0.016 0.000 0.005 0.016 0.000 0.022 0.853 0.016 0.011 0.022Food service workers 0.000 0.000 0.000 0.019 0.005 0.014 0.000 0.000 0.000 0.005 0.005 0.000 0.005 0.000 0.000 0.014 0.005 0.899 0.019 0.010Health service workers 0.088 0.000 0.000 0.000 0.000 0.000 0.000 0.018 0.000 0.000 0.000 0.009 0.000 0.000 0.000 0.009 0.000 0.009 0.858 0.009Personal service workers 0.008 0.000 0.000 0.025 0.000 0.000 0.000 0.000 0.034 0.000 0.000 0.008 0.000 0.000 0.000 0.025 0.017 0.008 0.017 0.856