Advanced Search
MyIDEAS: Login to save this paper or follow this series

Misery loves company: Exogenous shocks in retirement expectations and social comparison effects on subjective well-being

Contents:

Author Info

  • Montizaan Raymond
  • Vendrik Maarten

    (ROA rm)

Abstract

This study investigates the effects of social comparisons accompanying a substantialreform of the Dutch pension system on the job satisfaction of workers who are close toretirement. The reform implies that public sector workers born on January 1, 1950, orlater face a substantial reduction in their pension rights, while workers born before thisthreshold date can still retire under the old, more generous rules. Using unique matchedsurvey and administrative panel data on male public sector workers born in 1949 and1950, we find strong and persistent effects on job satisfaction that are sizable comparedto income effects on well-being. The drop in satisfaction is strongly affected by socialcomparisons with colleagues. Treated workers are less affected by the reform when thetreatment group is larger in the organization where they are employed. Moreover, thesocial comparison effect is especially prevalent in organizations that stimulate theiremployees to work in teams. We also find evidence that workers compare their ownreplacement rate with the average replacement of comparable individuals in theirorganization, but the major part of the social comparison effect is non-monetary.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://edocs.ub.unimaas.nl/loader/file.asp?id=1716
Download Restriction: no

Bibliographic Info

Paper provided by Maastricht University, Research Centre for Education and the Labour Market (ROA) in its series ROA Research Memorandum with number 013.

as in new window
Length:
Date of creation: 2012
Date of revision:
Handle: RePEc:unm:umaror:2012013

Contact details of provider:
Postal: P.O. Box 616, 6200 MD Maastricht
Phone: 043-3883647
Fax: 043-3210999
Email:
Web page: http://www.maastrichtuniversity.nl/
More information through EDIRC

Related research

Keywords: education; training and the labour market;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
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.:
as in new window
  1. 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).
  2. Andrew E. Clark & Ed Diener & Yannis Georgellis & Richard E. Lucas, 2008. "Lags and Leads in Life Satisfaction: A Test of the Baseline Hypothesis," SOEPpapers on Multidisciplinary Panel Data Research 84, DIW Berlin, The German Socio-Economic Panel (SOEP).
  3. Easterlin, Richard A., 1995. "Will raising the incomes of all increase the happiness of all?," Journal of Economic Behavior & Organization, Elsevier, vol. 27(1), pages 35-47, June.
  4. Andrew Clark, 2001. "Unemployment As A Social Norm: Psychological Evidence from Panel Data," DELTA Working Papers 2001-17, DELTA (Ecole normale supérieure).
  5. Axel Börsch-Supan & Hendrik Jürges, 2009. "Early Retirement, Social Security and Well-Being in Germany," NBER Chapters, in: Developments in the Economics of Aging, pages 173-199 National Bureau of Economic Research, Inc.
  6. 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, vol. 76(3), pages 834-852, December.
  7. Borsch-Supan, Axel, 2000. "Incentive effects of social security on labor force participation: evidence in Germany and across Europe," Journal of Public Economics, Elsevier, vol. 78(1-2), pages 25-49, October.
  8. Palacios, Robert & Whitehouse, Edward, 2006. "Civil-service pension schemes around the world," MPRA Paper 14796, University Library of Munich, Germany.
  9. Clark, Andrew E. & Senik, Claudia, 2009. "Who Compares to Whom? The Anatomy of Income Comparisons in Europe," IZA Discussion Papers 4414, Institute for the Study of Labor (IZA).
  10. Bruno S. Frey & Alois Stutzer, 2001. "What Can Economists Learn from Happiness Research?," CESifo Working Paper Series 503, CESifo Group Munich.
  11. Andrew Clark & Andreas Knabe & Steffen Rätzel, 2008. "Boon or Bane?: Others' Unemployment, Well-Being and Job Insecurity," SOEPpapers on Multidisciplinary Panel Data Research 153, DIW Berlin, The German Socio-Economic Panel (SOEP).
  12. David Card & Alex Mas & Enrico Moretti & Emmanuel Saez, 2010. "Inequality at Work: The Effect of Peer Salaries on Job Satisfaction," Working Papers 1269, Princeton University, Department of Economics, Industrial Relations Section..
  13. Tracy A. Falba & William T. Gallo & Jody L. Sindelar, 2008. "Work Expectations, Realizations, and Depression in Older Workers," NBER Working Papers 14435, National Bureau of Economic Research, Inc.
  14. Blau, David M, 1998. "Labor Force Dynamics of Older Married Couples," Journal of Labor Economics, University of Chicago Press, vol. 16(3), pages 595-629, July.
  15. Elsa Pilichowski & Edouard Turkisch, 2008. "Employment in Government in the Perspective of the Production Costs of Goods and Services in the Public Domain," OECD Working Papers on Public Governance 8, OECD Publishing.
  16. Keith A. Bender, 2004. "The Well-Being of Retirees: Evidence Using Subjective Data," Working Papers, Center for Retirement Research at Boston College wp2004-24, Center for Retirement Research.
  17. Michael Baker, 2003. "The Retirement Behavior of Married Couples: Evidence From The Spouse's Allowance," Working Papers 993, University of California, Davis, Department of Economics.
  18. Dhaval Dave & R. Inas Rashad & Jasmina Spasojevic, 2008. "The Effects of Retirement on Physical and Mental Health Outcomes," Southern Economic Journal, Southern Economic Association, vol. 75(2), pages 497-523, October.
  19. Carter, Steven & McBride, Michael, 2013. "Experienced utility versus decision utility: Putting the ‘S’ in satisfaction," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 42(C), pages 13-23.
  20. Glenn W. Harrison & John A. List, 2004. "Field Experiments," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1009-1055, December.
  21. Erzo F. P. Luttmer, 2005. "Neighbors as Negatives: Relative Earnings and Well-Being," The Quarterly Journal of Economics, MIT Press, vol. 120(3), pages 963-1002, August.
  22. Jonathan Gruber & David A. Wise, 2002. "Social Security Programs and Retirement Around the World: Micro Estimation," NBER Working Papers 9407, National Bureau of Economic Research, Inc.
  23. Gardner, Jonathan & Oswald, Andrew J., 2007. "Money and mental wellbeing: A longitudinal study of medium-sized lottery wins," Journal of Health Economics, Elsevier, vol. 26(1), pages 49-60, January.
  24. Blanchflower, David G. & Oswald, Andrew J., 2007. "Is Well-Being U-Shaped over the Life Cycle?," IZA Discussion Papers 3075, Institute for the Study of Labor (IZA).
  25. Courtney Coile, 2003. "Retirement Incentives and Couples' Retirement Decisions," NBER Working Papers 9496, National Bureau of Economic Research, Inc.
  26. Krueger, Alan B. & Schkade, David A., 2008. "The reliability of subjective well-being measures," Journal of Public Economics, Elsevier, vol. 92(8-9), pages 1833-1845, August.
  27. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May.
  28. Fehr, Ernst & Schmidt, Klaus M., 1999. "A theory of fairness, competition, and cooperation," Munich Reprints in Economics 20650, University of Munich, Department of Economics.
  29. Jones, Melanie K. & Jones, Richard J. & Latreille, Paul L. & Sloane, Peter J., 2008. "Training, Job Satisfaction and Workplace Performance in Britain: Evidence from WERS 2004," IZA Discussion Papers 3677, Institute for the Study of Labor (IZA).
  30. Rob Euwals & Daniel Vuuren & Ronald Wolthoff, 2010. "Early Retirement Behaviour in the Netherlands: Evidence From a Policy Reform," De Economist, Springer, vol. 158(3), pages 209-236, September.
  31. Courtney C. Coile & Phillip B. Levine, 2006. "Labor Market Shocks and Retirement: Do Government Programs Matter?," NBER Working Papers 12559, National Bureau of Economic Research, Inc.
  32. Frank, Robert H., 2008. "Should public policy respond to positional externalities?," Journal of Public Economics, Elsevier, vol. 92(8-9), pages 1777-1786, August.
  33. Vendrik, Maarten C.M. & Woltjer, Geert, 2006. "Happiness and Loss Aversion: When Social Participation Dominates Comparison," IZA Discussion Papers 2218, Institute for the Study of Labor (IZA).
  34. McBride, Michael, 2001. "Relative-income effects on subjective well-being in the cross-section," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 251-278, July.
  35. Richard Layard & Guy Mayraz & Stephen Nickell, 2009. "Does relative income matter? Are the critics right?," LSE Research Online Documents on Economics 28594, London School of Economics and Political Science, LSE Library.
  36. de Grip, Andries & Lindeboom, Maarten & Montizaan, Raymond, 2009. "Shattered Dreams: The Effects of Changing the Pension System Late in the Game," IZA Discussion Papers 4034, Institute for the Study of Labor (IZA).
  37. repec:crr:crrwps:2004-24 is not listed on IDEAS
  38. Clark, Andrew E. & Frijters, Paul & Shields, Michael A., 2007. "Relative Income, Happiness and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," IZA Discussion Papers 2840, Institute for the Study of Labor (IZA).
  39. Oswald, Andrew J. & Powdthavee, Nattavudh, 2008. "Does happiness adapt? A longitudinal study of disability with implications for economists and judges," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1061-1077, June.
  40. Ada Ferrer-i-Carbonell & Paul Frijters, 2002. "How important is Methodology for the Estimates of the Determinants of Happiness?," Tinbergen Institute Discussion Papers 02-024/3, Tinbergen Institute.
  41. Winkelmann, Liliana & Winkelmann, Rainer, 1998. "Why Are the Unemployed So Unhappy? Evidence from Panel Data," Economica, London School of Economics and Political Science, vol. 65(257), pages 1-15, February.
  42. Grip Andries de & Lindeboom Maarten & Montizaan Raymond, 2009. "Dreams: The Effects of Changing the Pension System Late in the Game," Research Memorandum 043, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  43. Clark, Andrew E. & Oswald, Andrew J., 1996. "Satisfaction and comparison income," Journal of Public Economics, Elsevier, vol. 61(3), pages 359-381, September.
  44. Courtney Coile & Jonathan Gruber, 2007. "Future Social Security Entitlements and the Retirement Decision," The Review of Economics and Statistics, MIT Press, vol. 89(2), pages 234-246, May.
  45. Ferrer-i-Carbonell, Ada, 2005. "Income and well-being: an empirical analysis of the comparison income effect," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 997-1019, June.
  46. Gardner, Jonathan & Oswald, Andrew J., 2005. "Do Divorcing Couples Become Happier By Breaking Up?," IZA Discussion Papers 1788, Institute for the Study of Labor (IZA).
  47. Williamson, Oliver E, 1973. "Markets and Hierarchies: Some Elementary Considerations," American Economic Review, American Economic Association, vol. 63(2), pages 316-25, May.
  48. Wilbert van der Klaauw, 2002. "Estimating the Effect of Financial Aid Offers on College Enrollment: A Regression-Discontinuity Approach," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(4), pages 1249-1287, November.
  49. Blau, David M., 1997. "Social security and the labor supply of older married couples," Labour Economics, Elsevier, vol. 4(4), pages 373-418, December.
  50. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
  51. Kapteyn, Arie & de Vos, Klaas, 1998. "Social Security and Labor-Force Participation in the Netherlands," American Economic Review, American Economic Association, vol. 88(2), pages 164-67, May.
  52. Simon Luechinger, 2009. "Valuing Air Quality Using the Life Satisfaction Approach," Economic Journal, Royal Economic Society, vol. 119(536), pages 482-515, 03.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. 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).

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:unm:umaror:2012013. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Charles Bollen).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.