Incentives in the public sector: evidence from a government agency

Simon Burgess, Carol Propper, Marisa Ratto, Emma Tominey

Research output: Contribution to journalArticleResearchpeer-review

7 Citations (Scopus)


We study the impact of team-based performance pay in a major UK government agency, the public employment service. The scheme covered quantity and quality targets, measured with varying degrees of precision. We use unique data from the agency's performance management system and personnel records, linked to local labour market data. We show that on average the scheme had no significant effect but had a substantial positive effect in small teams, fitting an explanation combining free riding and peer monitoring. The impact was greater on better-measured quantity outcomes than quality outcomes. The scheme was very cost effective in small offices.

Original languageEnglish
Pages (from-to)F117-F141
Number of pages25
JournalThe Economic Journal
Issue number605
Publication statusPublished - Oct 2017
Externally publishedYes

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