Title: Non-monetary%20rewards%20
1Non-monetary rewards compensating differentials
- 1. What are non-monetary non-wage rewards?
- MNCs
- Other jobs
- 2. Theory (Compensating differentials)
- 3. Empirical evidence
- Executive pay
- Teachers
21. Non-monetary non-wage rewards
- Components of compensation in International
Business (MNCs) senior managers - Base salary performance component
- Foreign service inducement
- Allowances housing, education, travel, security
- Benefits insurance pensions see Lazear
- Total remuneration
- Note Local circumstances
3Local Issues
- Legal constraints
- Mandated benefits Rewards limitations
- Tax law Labor relations law
- Social custom
- Role of family employer
- Role of government
- Economic differences
41. Non-monetary non-wage rewards
- Components of non-monetary compensation for lower
level jobs - Flexibility of hours
- Security risk of injury
- Conditions of work
- Training
- Preferences tastes are heterogenous
52. Theory
- Two types of worker
- Worker A strong preference for flexible hours
- Worker B weak preference for flexible hours
- More generally
- Workers vary in their preference for non-monetary
or non-pecuniary factors - E.g. teachers
- E.g. nurses
62. Theory
Wage
Indifference curves worker A
Flexible hours
72. Theory
Wage
Indifference curves worker B
Flexible hours
82. Theory
Worker A
Wage
(Pecuniary)
Worker B
C
Wc
S
WS
Y
X
Z
TC
TS
Flexible hours
(Non-pecuniary)
92. Theory
Worker A
Wage
(Pecuniary)
Worker B
C
Wc
S
WS
Y
X
Z
TC
TS
Flexible hours
(Non-pecuniary)
103. Empirical evidence School teachers
- For current teachers there are 2 key issues in
teacher labour supply - (a) Retention of teachers
- (b) Distribution of teacher quality across
school systems - Why do teachers exit teaching?
- Policy debate the relative role of pecuniary and
non-pecuniary factors - Shape the appropriate policy response
11Pecuniary and Non-Pecuniary Factors
- Previous literature
- Pecuniary
- Relative wage in other professions (Murnane and
Olsen, 1989 Dolton and Van der Klaauw,
1995,1999) - Non-Pecuniary
- Maternity (Stinebrickner, 2002)
- Class size and workload (Mont Rees, 1996)
12Data Source
- Use MOHRI (Minimum Obligatory Human Resource
Information) for the Australian state of
Queensland. - Covers whole population of state school teachers
(31,000) - Quarterly individual level data for 2001 and 2002
- Detailed human resource information
- Pay, allowances, contract type
- School information (school size, class size,
performance) - Personal characteristics (gender, ethnicity,
disability, education, subject specialisation)
13Permanent Teaching Labour Force - Summary
- Males Females
- Stayed Moved Exited Stayed Moved
Exited - Pecuniary
- Predicted Wage (log) 3.024 2.981 2.987
2.769 2.768 2.750 - Own wage (log) 3.320 3.291 3.282
3.255 3.240 3.229 - Locality Allowance 0.267 0.475 0.188
0.213 0.285 0.086 - Non-pecuniary
- School size (log) 6.237 5.941 6.270
6.171 5.991 6.208 - Average Class size (log) 2.200 2.215
2.155 2.321 2.307 2.288 - High student Perform 0.283 0.230 0.251
0.285 0.249 0.276 - Low student Perform 0.201 0.275 0.267
0.196 0.249 0.211 - Remote 0.062 0.143 0.065 0.072
0.110 0.081 - Rural 0.146 0.191 0.149 0.147
0.181 0.159 - Part-time 0.054
0.149 0.253 0.204 0.289 0.376 - Tenure yrs 16.091 10.716 10.670 11.765
8.906 8.300 - Observations 7,566 411
1,176 19,114 978 3,269
14Selected Estimates MNL Logit, Marginal Effects
- Males Females
- (p-val) Turnover Mobility Turnover
Mobility_ - Pecuniary
- Predicted Wage 0.021 (0.03) -0.025 (0.13)
-0.003 (0.80) -0.088 (0.00) - Own Wage -0.077 (0.00) -0.064 (0.01)
-0.052 (0.00) -0.044 (0.01) - Locality Allowance -0.008 (0.08) 0.009
(0.03) -0.041 (0.00) 0.016 (0.00) - Non-Pecuniary
- Primary -0.018 (0.03) 0.006 (0.62) -0.011
(0.01) 0.003 (0.70) - School Size 0.007 (0.13) -0.049 (0.00)
0.003 (0.22) -0.033 (0.00) - Average Class Size -0.008 (0.11) 0.049
(0.00) -0.003 (0.22) 0.031 (0.00) - High Student Perform -0.003 (0.57) -0.010
(0.25) 0.000 (0.98) -0.006 (0.29) - Low Student Perform 0.014 (0.00) 0.015
(0.08) 0.003 (0.28) 0.024 (0.00) - Part-time 0.061(0.00) 0.121(0.00) 0.027
(0.00) 0.053 (0.00) - Remote School 0.009 (0.32) 0.053 (0.00) 0.023
(0.00) 0.029 (0.00) - Rural School 0.005 (0.41) 0.012 (0.21)
0.015 (0.00) 0.012 (0.06)
Additional Controls Primary, Part-time,
Ethnicity, Disability, Subject specialisation,
Education Quals, Female staff, degree staff,
Number private schools in district, local
unemployment rate.
15Summary of evidence
- Pecuniary effects
- Higher wages deter turnover.
- Locality allowances deter turnover and encourage
mobility especially for female teachers - Locality allowances retain male teachers in
rural/remote locations - Non-pecuniary effects
- Primary schools have lower turnover
- Difficulty keeping less experienced female
teachers in rural/remote schools. - Mobility away from small schools/larger classes
-
- Conclusion
- Pecuniary and non-pecuniary influences on
turnover and mobility. - Locality allowances - encouraged some movement to
and reduced mobility away from rural/remote
schools