Quantitative Economics
Journal Of The Econometric Society
Edited by: Stéphane Bonhomme • Print ISSN: 1759-7323 • Online ISSN: 1759-7331
Quantitative Economics: Jan, 2020, Volume 11, Issue 1
The provision of wage incentives: A structural estimation using contracts variation
Xavier D'Haultfœuille, Philippe Février
We address empirically the issues of the optimality of simple linear compensation contracts and the importance of asymmetries between firms and workers. For that purpose, we consider contracts between the French National Institute of Statistics and Economics (Insee) and the interviewers it hired to conduct its surveys in 2001, 2002, and 2003. To derive our results, we exploit an exogenous change in the contract structure in 2003, the piece rate increasing from 20.2 to 22.9 euros. We argue that such a change is crucial for a structural analysis. It allows us, in particular, to identify and recover nonparametrically some information on the cost function of the interviewers and on the distribution of their types. This information is used to select correctly our parametric restrictions. Our results indicate that the loss of using such simple contracts instead of the optimal ones is no more than 16%, which might explain why linear contracts are so popular. We also find moderate costs of asymmetric information in our data, the loss being around 22% of what Insee could achieve under complete information.
Incentives asymmetric information optimal contracts nonparametric identification C14 D82 D86
Supplemental Material
Supplement to "The provision of wage incentives: A structural estimation using contracts variation"
Journal News
March 5, 2024
Announcing the New Journal Editors
The terms of the Editors of the Econometric Society's three journals end June 30, 2025. We are pleased to announce the incoming Editors and to thank the outgoing Editors for their excellent and continuing service.
Econometrica: Since 2019, Guido Imbens has served as the 14th Editor of Econometrica. On July 1, 2025, Marina Halac will become the Editor.
Quantitative Economics: Stéphane Bonhomme has been the Editor of Quantitative Economics since 2021. His successor will be Bernard Salanié.
Theoretical Economics: The Editor of Theoretical Economics since 2021 has been Simon Board. Taking over for him in July 2025 will be Federico Echenique.
Guido, Stéphane, and Simon have been outstanding Editors. We are grateful to them for the work they have done and will continue to do, and we look forward to further congratulating them next year. We believe Marina, Bernard, and Federico will be outstanding successors and we thank them in advance for their service.
Finally, we are grateful to Larry Samuelson for chairing all three search committees, and we thank the search committee members for their hard and fruitful work:
Econometrica: Christian Dustmann, Lars Hansen, Alessandro Lizzeri, George Mailath, Ariel Pakes, Helene Rey, and Elie Tamer.
QE: Kate Ho, Michael Keane, Felix Kubler, Whitney Newey, and Frank Schorfheide.
TE: Jeff Ely, Johannes Horner, Gilat Levy, Meg Meyer, and Ran Spiegler.
