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Within-establishment wage inequality and satisfaction

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  • Ambra Poggi

Abstract

We empirically model individual utility from pay as function of worker’s own wage and the earnings of all other workers within the same establishment. The aims of this paper are twofold: first, to study the mechanisms underlying the importance of relative wages in determining worker satisfaction; second, to assess whether high within establishment wage inequality leads, on average, to high satisfaction. .

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Paper provided by LABORatorio R. Revelli, Centre for Employment Studies in its series LABORatorio R. Revelli Working Papers Series with number 100.

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Date of creation: 2010
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Handle: RePEc:cca:wplabo:100

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Keywords: satisfaction; co-workers; envy; pride; wage inequality;

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  1. Robson, Arthur J, 1992. "Status, the Distribution of Wealth, Private and Social Attitudes to Risk," Econometrica, Econometric Society, Econometric Society, vol. 60(4), pages 837-57, July.
  2. Fehr, Ernst & Schmidt, Klaus M., 1998. "A Theory of Fairness, Competition and Cooperation," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1812, C.E.P.R. Discussion Papers.
  3. Christian Seidl & Stefan Traub & Andrea Morone, 2004. "Relative Deprivation, Personal Income Satisfaction, and Average Well-Being under Different Income Distributions," Experimental, EconWPA 0401004, EconWPA.
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  5. Akerlof, George A & Yellen, Janet L, 1990. "The Fair Wage-Effort Hypothesis and Unemployment," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 105(2), pages 255-83, May.
  6. David Card & Alex Mas & Enrico Moretti & Emmanuel Saez, 2010. "Inequality at Work: The Effect of Peer Salaries on Job Satisfaction," Working Papers, Princeton University, Department of Economics, Industrial Relations Section. 1269, Princeton University, Department of Economics, Industrial Relations Section..
  7. Janiszewski, Chris & Lichtenstein, Donald R, 1999. " A Range Theory Account of Price Perception," Journal of Consumer Research, University of Chicago Press, University of Chicago Press, vol. 25(4), pages 353-68, March.
  8. Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
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  11. Stadt, H. van de & Geer, S.A. van de & Kapteyn, A.J., 1985. "The relativity of utility: Evidence from panel data," Open Access publications from Tilburg University urn:nbn:nl:ui:12-364325, Tilburg University.
  12. Andrew E. Clark & Nicolai Kristensen & Niels Westergård-Nielsen, 2009. "Economic Satisfaction and Income Rank in Small Neighbourhoods," Journal of the European Economic Association, MIT Press, MIT Press, vol. 7(2-3), pages 519-527, 04-05.
  13. M Patterson & P Warr & M West, 2004. "Organizational Climate and Company Productivity: the Role of Employee Affect and Employee Level," CEP Discussion Papers, Centre for Economic Performance, LSE dp0626, Centre for Economic Performance, LSE.
  14. Stutzer, Alois, 2004. "The role of income aspirations in individual happiness," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 54(1), pages 89-109, May.
  15. Vendrik, Maarten & Woltjer, Geert, 2006. "Happiness and Loss Aversion: When Social Participation Dominates Comparision," Research Memorandum 027, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  16. Blanchflower, David G. & Oswald, Andrew J., 2004. "Well-being over time in Britain and the USA," Journal of Public Economics, Elsevier, Elsevier, vol. 88(7-8), pages 1359-1386, July.
  17. Wunder, Christoph & Schwarze, Johannes, 2006. "Income Inequality and Job Satisfaction of Full-Time Employees in Germany," IZA Discussion Papers 2084, Institute for the Study of Labor (IZA).
  18. Rojas, Mariano, 2007. "Heterogeneity in the relationship between income and happiness: A conceptual-referent-theory explanation," Journal of Economic Psychology, Elsevier, Elsevier, vol. 28(1), pages 1-14, January.
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