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Negative Reciprocity and Retrenched Pension Rights

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Author Info

  • Montizaan, Raymond

    ()
    (ROA, Maastricht University)

  • Cörvers, Frank

    ()
    (ROA, Maastricht University)

  • de Grip, Andries

    ()
    (ROA, Maastricht University)

  • Dohmen, Thomas

    ()
    (University of Bonn)

Abstract

We document the importance of negatively reciprocal inclinations in labor relationships by showing that a retrenchment of pension rights, which is perceived as unfair, causes a larger reduction in job motivation the stronger workers' negatively reciprocal inclinations are. We exploit unique matched survey and administrative data on male employees in the public sector in the Netherlands and compare the job motivation of employees born in 1950, who faced a substantial retrenchment of their pension rights resulting from a pension reform in 2006, to that of slightly older employees who remain entitled to more generous pension benefits. Job motivation is significantly lower among negatively reciprocal employees who were affected by the reform. The negative effect on job motivation is greater for negative reciprocal employees born very shortly after the cut-off date of January 1, 1950, as well as for those with many untreated colleagues, and who therefore arguably perceive the policy change as being more unfair. We also find that the treatment effect is stronger among workers who are more likely to hold their employer accountable for the drop in their pension rights, that is, those who work for the national government.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6955.

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Length: 40 pages
Date of creation: Oct 2012
Date of revision:
Handle: RePEc:iza:izadps:dp6955

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Keywords: reciprocity; job motivation; retrenchment of pension rights;

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References

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Cited by:
  1. Dohmen, Thomas, 2014. "Behavioural Labour Economics: Advances and Future Directions," IZA Discussion Papers 8263, Institute for the Study of Labor (IZA).
  2. Fouarge D. & Grip A. de & Montizaan R.M., 2013. "How sensitive are individual retirement expectations to raising the retirement age?," ROA Research Memorandum 006, Maastricht University, Research Centre for Education and the Labour Market (ROA).

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