Piece Rates and Workplace Injury: Does Survey Evidence Support Adam Smith?

Dr Colin Green from Lancaster University on Wednesday 11 Nov, 16h00.
Room G11.

Abstract

The link between piece rates and productivity is well established, both empirically and theoretically. Little is known about their impact on profitability and there are long-standing concerns about offsetting effects. These remain largely empirically untested. This paper uses cross-country European data to test one such offsetting effect the link between piece rates and workplace injury. We demonstrate a sizeable increase in workplace injuries under piece rates. Even after controlling for a range of factors, such as workplace hazards, task types and variations in worker effort, piece rates are associated with a 5 percentage point increase in the likelihood of workers suffering an injury.