“Not Just for the Money?” How Financial Incentives Affect the Number of Publications at Danish Research Institutions

ABSTRACT

Do public employees work “for the money?” Do financial incentives determine their work effort? The literature gives conflicting answers, but Frey (1997) offers a possible explanation: If financial incentives are perceived as supportive, they can “crowd in” intrinsic motivation and increase the work effort. But if financial incentives are perceived as controlling, the intrinsic motivation is “crowded out,” and the work effort decreases with increasing financial incentives to work. However, the empirical evidence concerning Frey's proposition is limited, and our article aims to fill part of this gap. We investigate how the introduction of financial incentives to publish affects the number of publications at 162 Danish research institutions (17 government research institutions and subunits of 10 universities) when the perception of the incentives is taken into account. The results show that the more supportive employees consider the incentives to be, the more financial incentives motivate researchers to increase publication.

ACKNOWLEDGEMENTS

We are very grateful for the data provided by The Danish Centre for Studies in Research and Research Policy (number of employees at the research institutions) and for financial resources from the Department of Political Science, University of Aarhus, and useful comments to earlier drafts from the department's public administration section. We are also very thankful to Christian Bøtcher Jacobsen and Anne Line Møller for high quality work in collecting the publication data. Finally, we are extremely grateful to the members of the 2006 EGPA workshop in Milan, especially James L. Perry and Barry Bozeman, for outstanding comments and superb helpfulness with references to the literature in the field.

Notes

Notes: Based on the coding of the local wage agreements. 20 institutions are excluded because we do not have information about the agreements.

Notes: Based on the coding of the local wage agreements. 2006. One component extracted with an Eigen value higher than 1 (2.67). Extraction Method: Principal Component Analysis. N = 124 units with agreements.

Notes: Extraction method: Principal Component Analysis. One component extracted with Eigen value higher than 1 (1.89). N = 67 union representatives (some of whom represent more than one unit).

Notes: *p < 0.1, **p < 0.05, ***p < 0.01.

The calculation of the relative change is:

The Danish Centre for Studies in Research and Research Policy kindly provided the data.

Additional information

Notes on contributors

Lotte Bøgh Andersen

Lotte Bøgh Andersen ([email protected]) is an Assistant Professor in Public Administration and Methodology at the Department of Political Science, University of Aarhus, Denmark. She received her PhD at the University of Aarhus. Her research focuses on the behavior and performance of pubic employees, especially the effects of economic incentives and professional norms. She is currently part of a research project on economic incentives in the Danish public sector (www.okinos.dk).

Thomas Pallesen

Thomas Pallesen ([email protected]) is a Professor in Public Administration at the Department of Political Science, University of Aarhus. His research is about the interaction between politicians and bureaucrats with special focus on the discretion of street-level bureaucrats. He is also part of the project on economic incentives.