The Selection and Incentive Effects of Equal-Sharing
Title: The Selection and Incentive Effects of Equal-Sharing
Principal Investigator: Ran Abramitzky
Dates: August 1, 2007 - July 31, 2010
Sponsor: National Science Foundation
Incentive theory predicts that more equal sharing (pay less sensitive to performance) provides insurance but discourages participation of high-ability individuals and encourages free-riding. Yet, evaluating the empirical relevance of these predictions has been challenging, mainly due to data limitation. This proposed research will take a step towards filling this gap by analyzing unique data sets that are especially suited to test the selection and incentive effects of equal-sharing. The data contain rich panel information on both individuals and Kibbutzim (plural of Kibbutz), which are communities that have recently shifted non-uniformly from an equal-sharing scheme to pay-for performance.
Incentive theory predicts that more equal sharing (pay less sensitive to performance) provides insurance but discourages participation of high-ability individuals and encourages free-riding. Yet, evaluating the empirical relevance of these predictions has been challenging, mainly due to data limitation. This proposed research will take a step towards filling this gap by analyzing unique data sets that are especially suited to test the selection and incentive effects of equal-sharing. The data contain rich panel information on both individuals and Kibbutzim (plural of Kibbutz), which are communities that have recently shifted non-uniformly from an equal-sharing scheme to pay-for performance.