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Extra Status and Extra Stress: Are Promotions Good for Us?

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  • Johnston, David W.

    ()
    (Monash University)

  • Lee, Wang-Sheng

    ()
    (Deakin University)

Abstract

Promotions ordinarily involve higher wages and greater privileges; but they also often involve increased responsibility, accountability and work hours. Therefore, whether promotions are good for workers' wellbeing is an empirical question. Using high-quality panel data we estimate pre- and post-promotion effects on job attributes, physical health, mental health and life satisfaction, in an attempt at answering this question. We find that promotions substantially improve job security, pay perceptions and overall job satisfaction in the short term, and that promotions have short and longer term effects on job control, job stress, income and hours worked. However, despite these large effects on job attributes, we find that promotions have negligible effects on workers' health and happiness. Only mental health seems affected, with estimates suggesting significant deterioration two years after receiving a promotion. Thus, it seems the additional stress involved with promotions eventually outweighs the additional status, at least for the average worker.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6675.

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Length: 32 pages
Date of creation: Jun 2012
Date of revision:
Publication status: published in: Industrial and Labor Relations Review, 2013, 66 (1), 32-54
Handle: RePEc:iza:izadps:dp6675

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Keywords: status; stress; job satisfaction; promotion;

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References

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  1. Andrew E. Clark & Ed Diener & Yannis Georgellis & Richard E. Lucas, 2008. "Lags And Leads in Life Satisfaction: a Test of the Baseline Hypothesis," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 118(529), pages F222-F243, 06.
  2. David S. Johnson & Jonathan A. Parker & Nicholas S. Souleles, 2004. "Household Expenditure and the Income Tax Rebates of 2001," NBER Working Papers 10784, National Bureau of Economic Research, Inc.
  3. Nattavudh Powdthavee, 2009. "Anticipation, Free Rider Problem, and Adaptation to Trade Union: Re-examining the Curious Case of Dissatisfied Union Members," Discussion Papers, Department of Economics, University of York 09/04, Department of Economics, University of York.
  4. van Vegchel, Natasja & de Jonge, Jan & Bosma, Hans & Schaufeli, Wilmar, 2005. "Reviewing the effort-reward imbalance model: drawing up the balance of 45 empirical studies," Social Science & Medicine, Elsevier, Elsevier, vol. 60(5), pages 1117-1131, March.
  5. David M. Cutler & Angus S. Deaton & Adriana Lleras-Muney, 2006. "The Determinants of Mortality," NBER Working Papers 11963, National Bureau of Economic Research, Inc.
  6. Johnston, David W. & Lee, Wang-Sheng, 2011. "Climbing the Job Ladder: New Evidence of Gender Inequity," IZA Discussion Papers 5970, Institute for the Study of Labor (IZA).
  7. Paul Frijters & David W. Johnston & Michael A. Shields, 2011. "Life Satisfaction Dynamics with Quarterly Life Event Data," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 113(1), pages 190-211, 03.
  8. Di Tella, Rafael & Haisken-De New, John & MacCulloch, Robert, 2010. "Happiness adaptation to income and to status in an individual panel," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 76(3), pages 834-852, December.
  9. Greiner, Alfred, 2008. "An economic model of work-related stress," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 66(2), pages 335-346, May.
  10. Griffin, Joan M. & Fuhrer, Rebecca & Stansfeld, Stephen A. & Marmot, Michael, 2002. "The importance of low control at work and home on depression and anxiety: do these effects vary by gender and social class?," Social Science & Medicine, Elsevier, Elsevier, vol. 54(5), pages 783-798, March.
  11. Fischer, Justina A.V. & Sousa-Poza, Alfonso, 2007. "Does Job Satisfaction Improve the Health of Workers? New Evidence Using Panel Data and Objective Measures of Health," IZA Discussion Papers 3256, Institute for the Study of Labor (IZA).
  12. Boyce, Christopher J. & Oswald, Andrew J., 2008. "Do People Become Healthier after Being Promoted?," IZA Discussion Papers 3894, Institute for the Study of Labor (IZA).
  13. Anne Case & Christina Paxson, 2010. "The Long Reach of Childhood Health and Circumstance: Evidence from the Whitehall II Study," NBER Working Papers 15640, National Bureau of Economic Research, Inc.
  14. Frijters, Paul & Haisken-DeNew, John P. & Shields, Michael A., 2005. "The causal effect of income on health: Evidence from German reunification," Journal of Health Economics, Elsevier, Elsevier, vol. 24(5), pages 997-1017, September.
  15. Francesconi, Marco, 2001. " Determinants and Consequences of Promotions in Britain," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, Department of Economics, University of Oxford, vol. 63(3), pages 279-310, July.
  16. Brown, Gordon D. A. & Gardner, Jonathan & Oswald, Andrew J. & Qian, Jing, 2005. "Does Wage Rank Affect Employees' Wellbeing?," IZA Discussion Papers 1505, Institute for the Study of Labor (IZA).
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Cited by:
  1. Buddelmeyer, Hielke & McVicar, Duncan & Wooden, Mark, 2013. "Non-Standard 'Contingent' Employment and Job Satisfaction: A Panel Data Analysis," IZA Discussion Papers 7590, Institute for the Study of Labor (IZA).
  2. Grimani, Katerina, 2014. "Labor earnings and Psychological well-being: An Empirical Analysis," MPRA Paper 57098, University Library of Munich, Germany.

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