Job Satisfaction and Co-worker Wages: Status or Signal?
AbstractThis paper uses matched employer-employee panel data to show that individual job satisfaction is higher when other workers in the same establishment are better-paid. This runs contrary to a large literature which has found evidence of income comparisons in subjective well-being. We argue that the difference hinges on the nature of the reference group. We here use co-workers. Their wages not only induce jealousy, but also provide a signal about the worker’s own future earnings. Our positive estimated coefficient on others’ wages shows that this positive future earnings signal outweighs any negative status effect. This phenomenon is stronger for men, and in the private sector.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3073.
Length: 30 pages
Date of creation: Sep 2007
Date of revision:
Publication status: published in: Economic Journal, 2009, 119 (536), 430–447
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Other versions of this item:
- AndrewE. Clark & Nicolai Kristensen & Niels Westergård-Nielsen, 2009. "Job Satisfaction and Co-worker Wages: Status or Signal?," Economic Journal, Royal Economic Society, vol. 119(536), pages 430-447, 03.
- Andrew E. Clark & Nicolai Kristensen & Niels Westergård-Nielsen, 2007. "Job satisfaction and co-worker wages: Status or signal?," PSE Working Papers halshs-00587878, HAL.
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
- J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-10-06 (All new papers)
- NEP-BEC-2007-10-06 (Business Economics)
- NEP-CBE-2007-10-06 (Cognitive & Behavioural Economics)
- NEP-HAP-2007-10-06 (Economics of Happiness)
- NEP-LAB-2007-10-06 (Labour Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Louis Lévy-Garboua & Claude Montmarquette & Véronique Simonnet, 2007.
"Job Satisfaction and Quits,"
UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers)
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