Information, Loss Framing, and Spillovers in Pay-for-Performance Contracts
Do incentives matter beyond the information conveyed by pay-for-performance contracts? Does loss framing matter? And do incomplete contracts generate spillovers on unincentivized tasks? This study reports on a framed field experiment with 1,363 mat...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/918691622646942703/Information-Loss-Framing-and-Spillovers-in-Pay-for-Performance-Contracts http://hdl.handle.net/10986/35724 |
| Summary: | Do incentives matter beyond the
information conveyed by pay-for-performance contracts? Does
loss framing matter? And do incomplete contracts generate
spillovers on unincentivized tasks? This study reports on a
framed field experiment with 1,363 maternity care workers in
691 primary health facilities in Nigeria to answer these
questions. Participants were randomized into three study
arms—(1) information with a flat participation fee, (2)
performance-based rewards, and (3) performance-based
penalties. In each arm, participants had to identify correct
clinical actions based on the records of hypothetical
patients receiving maternity care. Five of fifteen possible
actions were incentivized but performance was measured on
all fifteen. Compared to information alone, both rewards and
penalties increase time on task by 11 percent, correct
overall performance by 6 to 8 percent, and directly
incentivized performance by 20 percent. Incentives also
generate positive spillovers of 14 percent on unincentivized
tasks. Loss framing does not affect performance. Results
suggest that improving health worker effort by 8 percent
would have an impact on neonatal mortality at par with the
short run effect of adding a physician to a health facility.
Finally, findings show that a small incentive captures most
of the impact, implying that incentives work by making
information more effective and that pay-for-performance
contracts can be made significantly more cost-effective. |
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