Incentive Pay and Social Returns to Worker Effort in Public Programs: Evidence from the Weatherization Assistance Program /
Christensen, Peter.
Incentive Pay and Social Returns to Worker Effort in Public Programs: Evidence from the Weatherization Assistance Program / Peter Christensen, Paul Francisco, Erica Myers. - Cambridge, Mass. National Bureau of Economic Research 2023. - 1 online resource: illustrations (black and white); - NBER working paper series no. w31322 . - Working Paper Series (National Bureau of Economic Research) no. w31322. .
June 2023.
Aligning compensation with recipient outcomes has the potential to improve the efficiency of government programs. We perform a field experiment to evaluate the impact of performance bonuses on the returns to spending in a large low-income energy efficiency assistance program. We find that performance-based bonuses dramatically increased program natural gas savings by 24%. The bonuses generate $5.39-$14.53 in social benefits for every dollar invested and increase the social net benefits from home-level weatherization more than two-fold. Contractors performing at high quality at baseline respond disproportionately to the incentives, suggesting that gains in the program's cost-effectiveness result from more efficient allocation of worker effort across workers who differ in their marginal effort cost. We do not find evidence of learning within the two-year study period or of increased deficiencies among non-incentivized tasks.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.
Public Goods
General
Energy
General
Incentive Pay and Social Returns to Worker Effort in Public Programs: Evidence from the Weatherization Assistance Program / Peter Christensen, Paul Francisco, Erica Myers. - Cambridge, Mass. National Bureau of Economic Research 2023. - 1 online resource: illustrations (black and white); - NBER working paper series no. w31322 . - Working Paper Series (National Bureau of Economic Research) no. w31322. .
June 2023.
Aligning compensation with recipient outcomes has the potential to improve the efficiency of government programs. We perform a field experiment to evaluate the impact of performance bonuses on the returns to spending in a large low-income energy efficiency assistance program. We find that performance-based bonuses dramatically increased program natural gas savings by 24%. The bonuses generate $5.39-$14.53 in social benefits for every dollar invested and increase the social net benefits from home-level weatherization more than two-fold. Contractors performing at high quality at baseline respond disproportionately to the incentives, suggesting that gains in the program's cost-effectiveness result from more efficient allocation of worker effort across workers who differ in their marginal effort cost. We do not find evidence of learning within the two-year study period or of increased deficiencies among non-incentivized tasks.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.
Public Goods
General
Energy
General