A new GLO Discussion Paper finds for Germany that the likelihood of consuming each of four types of alcohol (beer, wine, spirits, and mixed drinks) is higher for those receiving performance pay, and their total number of types of alcohol consumed is larger. This confirms previous results published in the Journal of Population Economics for the USA.
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GLO Discussion Paper No. 800, 2021
Performance Pay and Alcohol Use in Germany – Download PDF
by Baktash, Mehrzad B. & Heywood, John S. & Jirjahn, Uwe
GLO Fellows Mehrzad B. Baktash, John Heywood and Uwe Jirjahn
Mehrzad B. Baktash 
John Heywood 
Uwe Jirjahn
Author Abstract: We study the link between performance pay and alcohol use in Germany, a country with mandated health insurance. Previous research from the US argues that alcohol use as a form of “self-medication” may be a natural response to the stress and uncertainty of performance pay when many workers do not have access to health insurance. We find that the likelihood of consuming each of four types of alcohol (beer, wine, spirits, and mixed drinks) is higher for those receiving performance pay even controlling for a long list of economic, social and personality characteristics and in sensible IV estimates. We also show that the total number of types of alcohol consumed is larger for those receiving performance pay. We conclude that even in the face of mandated health insurance, the link found in the US persists in Germany.
Related paper published ONLINE FIRST 2020 in the Journal of Population Economics:
Does performance pay increase alcohol and drug use?
by Benjamin Artz, Colin P. Green and GLO Fellow John S. Heywood
Forthcoming in a regular issue 2021: Read for free — READLINK: https://rdcu.be/chTbM
GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS, EconPapers). Complete list of all GLO DPs – downloadable for free.
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