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Do Higher Wages Come at a Price?

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  • Erling Barth
  • Alex Bryson
  • Harald Dale-Olsen

Abstract

Using linked employer-employee data for Britain we find job satisfaction and job anxiety are negatively correlated but higher wages are associated with higher job satisfaction and higher job anxiety. However, we observe a positive association between higher wages and non-pecuniary job satisfaction, which disappears with the inclusion of our effort measures. Thus high effort levels provide high levels of non-pecuniary job satisfaction and higher wages, in contrast to what compensating wage differentials predicts. On the other hand, the positive association between wages and pay satisfaction and the positive association between wages and job anxiety are both robust to the inclusion of our effort measures and rich job controls. Mean wages of co-workers are positively associated with pay satisfaction but there is no significant association with non-pecuniary job satisfaction or job anxiety. Thus there is a positive spill-over to workers from being in a high-wage workplace and there is no support for the proposition that within-workplace wage differentials are a source of job anxiety.

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Bibliographic Info

Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp1011.

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Date of creation: Oct 2010
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Handle: RePEc:cep:cepdps:dp1011

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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

Related research

Keywords: worker wellbeing; job stress; job anxiety; job satisfaction; wages; compensating differentials;

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References

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Cited by:
  1. Haile, Getinet Astatike & Bryson, Alex & White, Michael, 2012. "Heterogeneity in Union Status and Employee Well-Being," IZA Discussion Papers 7075, Institute for the Study of Labor (IZA).
  2. Rees, Daniel I. & Sabia, Joseph J., 2012. "Migraine Headache and Labor Market Outcomes," IZA Discussion Papers 7034, Institute for the Study of Labor (IZA).
  3. Jones, Melanie K. & Latreille, Paul L. & Sloane, Peter J., 2011. "Job Anxiety, Work-Related Psychological Illness and Workplace Performance," IZA Discussion Papers 5809, Institute for the Study of Labor (IZA).

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