Within-establishment wage inequality and satisfaction
The aim of this paper is to provide fresh empirical evidence on the mechanisms through which wage inequality affects worker satisfaction.Theoretically, the wages of others may affect workers' utility for two main reasons: Workers may derive well-being from their social status (the comparison effect) and/or they may use others' wages to help predict their own future wage (the information effect). The author tests both hypotheses. To do this, she models individual utility from pay as a function of a workers own wage and the earnings of all other workers within the same establishment, and she estimates the model using matched British employeremployee data. The author assumes incomplete information about others' wages. She finds that the comparison effect matters. Interestingly, she also provides some evidence on a positive relation between well-being and inequality. Her results are robust to different specifications and different definitions of the reference group.
Volume (Year): 8 (2014)
Issue (Month): ()
|Contact details of provider:|| Postal: Kiellinie 66, D-24105 Kiel|
Phone: +49 431 8814-1
Fax: +49 431 8814528
Web page: http://www.economics-ejournal.org/
More information through EDIRC
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.:
- Angus Deaton, 2001.
"Health, Inequality, and Economic Development,"
NBER Working Papers
8318, National Bureau of Economic Research, Inc.
- Angus Deaton, 2002. "Health, inequality, and economic development," Working Papers 209, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
- Angus Deaton, 2002. "Health, inequality, and economic development," Working Papers 270, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Health and Wellbeing..
- Deaton, A., 2001. "Health, Inequality, and Economic Development," Papers 200, Princeton, Woodrow Wilson School - Development Studies.
- M Patterson & P Warr & M West, 2004.
"Organizational Climate and Company Productivity: the Role of Employee Affect and Employee Level,"
CEP Discussion Papers
dp0626, Centre for Economic Performance, LSE.
- Malcolm Patterson & Peter Warr & Michael West, 2004. "Organizational climate and company productivity: the role of employee affect and employee level," LSE Research Online Documents on Economics 19977, London School of Economics and Political Science, LSE Library.
- Andrew E. Clark & Nicolai Kristensen & Niels Westergård-Nielsen, 2008.
"Economic satisfaction and income rank in small neighbourhoods,"
PSE Working Papers
- Andrew E. Clark & Nicolai Kristensen & Niels Westergård-Nielsen, 2009. "Economic Satisfaction and Income Rank in Small Neighbourhoods," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 519-527, 04-05.
- Clark, Andrew E. & Kristensen, Nicolai & Westergård-Nielsen, Niels C., 2008. "Economic Satisfaction and Income Rank in Small Neighbourhoods," IZA Discussion Papers 3813, Institute for the Study of Labor (IZA).
- Clark, Andrew E. & Kristensen, Nicolai & Westergaard-Nielsen, Niels, 2008. "Economic Satisfaction and Income Rank in Small Neighbourhoods," Working Papers 08-25, University of Aarhus, Aarhus School of Business, Department of Economics.
- Andrew E. Clark & Niels Westergaard-Nielsen & Nicolai Kristensen, 2009. "Economic satisfaction and income rank in small neighbourhoods," Post-Print halshs-00754383, HAL.
- George A. Akerlof & Janet L. Yellen, 1990. "The Fair Wage-Effort Hypothesis and Unemployment," The Quarterly Journal of Economics, Oxford University Press, vol. 105(2), pages 255-283.
- Christian Seidl & Stefan Traub & Andrea Morone, 2004.
"Relative Deprivation, Personal Income Satisfaction, and Average Well-Being under Different Income Distributions,"
- Seidl, Christian & Traub, Stefan & Morone, Andrea, 2005. "Relative Deprivation, Personal Income Satisfaction, and Average Well-being under Different Income Distributions," Working Paper Series RP2005/04, World Institute for Development Economic Research (UNU-WIDER).
- Seidl, Christian & Traub, Stefan & Morone, Andrea, 2003. "Relative Deprivation, Personal Income Satisfaction, and Average Well-Being under Different Income Distributions," Economics Working Papers 2003,05, Christian-Albrechts-University of Kiel, Department of Economics.
- 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.
- Albert O. Hirschman & Michael Rothschild, 1973. "The Changing Tolerance for Income Inequality in the Course of Economic DevelopmentWith A Mathematical Appendix," The Quarterly Journal of Economics, Oxford University Press, vol. 87(4), pages 544-566.
- Kahneman, Daniel & Tversky, Amos, 1979.
"Prospect Theory: An Analysis of Decision under Risk,"
Econometric Society, vol. 47(2), pages 263-91, March.
- Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
- P. J. Sloane & H. Williams, 2000. "Job Satisfaction, Comparison Earnings, and Gender," LABOUR, CEIS, vol. 14(3), pages 473-502, 09.
- Robson, Arthur J, 1992. "Status, the Distribution of Wealth, Private and Social Attitudes to Risk," Econometrica, Econometric Society, vol. 60(4), pages 837-57, July.
When requesting a correction, please mention this item's handle: RePEc:zbw:ifweej:20144. 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: (ZBW - German National Library of Economics)
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.