Actually, all the studies talk about incentives in the sense of "additional compensation that is conditional upon performance" not base pay. Here's why more money works: not everyone has the same expenses. Some of the best are married with kids. I don't like to spend time away from my kids or my wife, but knowing that when I take two weeks off its to go visit the wife's family that I'm paying to fly to Hawaii makes my life, and hers, that bit more bearable when she hasn't seen me for days.
Yes, a low salary will get you some young qualified programmers, or some older ones with no life. But you will increase your hiring pool by offering more money.
No, it doesn't solve the problem of how to tell the good ones from the shit ones, but it does increase the total number of good ones available.
