Working Paper: CEPR ID: DP18477
Authors: Erika Deserranno; Stefano Caria; Gianmarco Lenciliotta; Philipp Kastrau
Abstract: Does the allocation of incentives across the hierarchy of an organization matter for its performance? In a field experiment with a large public-health organization in Sierra Leone, we find that healthcare provision is highly affected by how incentives are allocated between frontline workers and their supervisors. Sharing incentives equally be- tween these two layers raises completed health visits by 61% compared to the unilateral allocations that are typical in public-health organizations. Also, the shared incentives uniquely improve overall health service provision and health outcomes. We provide reduced form and structural evidence that these results are driven by a combination of effort complementarities and contractual frictions, and we explore the implications of these forces for the optimal design of incentive policies in multi-layered organizations.
Keywords: incentives; multilayered organizations; hierarchies; effort complementarities; side payments; output
JEL Codes: O15; O55; I15; J31; M52
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| sharing incentives equally between frontline workers and their supervisors (J33) | increase in health visits (I19) |
| unilateral incentive allocations (M52) | decrease in health visits (I14) |
| effort complementarities and contractual frictions (D86) | increase in health visits (I19) |
| shared incentives treatment (J33) | improvements in health outcomes (I14) |
| shared incentives treatment (J33) | increased prenatal visits (J13) |
| shared incentives treatment (J33) | reduced disease incidence among children (I14) |