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My Wage is Unfair! Just a Feeling or Comparison with Peers?

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  • Schneck, Stefan

Abstract

This paper analyzes the nexus between income comparisons and perceptions of unfair pay. We apply a large German household survey and conduct wage regressions to conclude whether individuals who perceive their wages as unfair earn significantly lower wages than fairly paid individuals with similar characteristics. We find that unfairly paid individuals earn significantly less than fairly paid counterparts. This suggests that unfairness perceptions with respect to wages are based on sound income comparisons with peers. We also contribute findings to the literature on reference points. When asked about a subjectively fair amount in Euros, unfairly paid individuals tend to claim much higher wages than fairly paid individuals with identical characteristics. Wage claims, thus, rest on additional factors.

Suggested Citation

  • Schneck, Stefan, 2014. "My Wage is Unfair! Just a Feeling or Comparison with Peers?," Review of Behavioral Economics, now publishers, vol. 1(3), pages 245-273, May.
    • Handle: RePEc:now:jnlrbe:105.00000012
    DOI: 10.1561/105.00000012
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    Cited by:

    1. Christian Pfeifer & Gesine Stephan, 2019. "Why women do not ask: gender differences in fairness perceptions of own wages and subsequent wage growth," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 43(2), pages 295-310.
    2. Christian Pfeifer, 2015. "UnfairWage Perceptions and Sleep: Evidence from German Survey Data," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 135(4), pages 413-428.
    3. Laura Luekemann & Anja-Kristin Abendroth, 2018. "Women in the German Workplace: What Facilitates or Constrains Their Claims-Making for Career Advancement?," Social Sciences, MDPI, vol. 7(11), pages 1-34, October.
    4. Strauß, Susanne & Brüggemann, Ole & Lang, Julia, 2024. "Who perceives lower wages for women to be fair? How perceptions of the fairness of men's and women's wages vary by firm and workplace characteristics," Working Papers 29, University of Konstanz, Cluster of Excellence "The Politics of Inequality. Perceptions, Participation and Policies".

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    More about this item

    Keywords

    Fairness; Wages; Reference points;
    All these keywords.

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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