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Relative Wage Positions and Quit Behavior: New Evidence from Linked Employer-Employee Data

Author

Listed:
  • Christian Pfeifer

    () (Institute of Economics, Leuphana University of Lüneburg, Germany)

  • Stefan Schneck

    () (Institute of Empirical Economic Research, Leibniz Universität Hannover)

Abstract

We use a large linked employer-employee data set to analyze the importance of relative wage positions in the context of individual quit decisions as an inverse measure of job satisfaction. Our main findings are: (1) Workers with higher relative wage positions within their firms are on average more likely to quit their jobs than workers with lower relative wage positions; and (2) workers, who experience a loss in their relative wage positions, are also more likely to have a wage cut associated with their job-to-job transition. The overall results therefore suggest that the status effect is dominated by an opposing signal effect.

Suggested Citation

  • Christian Pfeifer & Stefan Schneck, 2010. "Relative Wage Positions and Quit Behavior: New Evidence from Linked Employer-Employee Data," Working Paper Series in Economics 163, University of Lüneburg, Institute of Economics.
  • Handle: RePEc:lue:wpaper:163
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    Cited by:

    1. Schneck, Stefan, 2014. "My Wage is Unfair! Just a Feeling or Comparison with Peers?," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 245-273.
    2. Sami Miaari & Asaf Zussman & Noam Zussman, 2012. "Ethnic conflict and job separations," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(2), pages 419-437, January.
    3. Robert Wagner & Thomas Zwick, 2012. "How Acid are Lemons? Adverse Selection and Signalling for Skilled Labour Market Entrants," Economics of Education Working Paper Series 0071, University of Zurich, Department of Business Administration (IBW), revised Feb 2012.
    4. Stefan Schneck, 2011. "The Effect of Relative Standing on Considerations about Self-Employment," SOEPpapers on Multidisciplinary Panel Data Research 426, DIW Berlin, The German Socio-Economic Panel (SOEP).
    5. Gerlach, Knut & Hübler, Olaf & Stephan, Gesine, 2011. "Beschäftigung zwischen Mobilität und Stabilität : empirische Befunde und wirtschaftspolitische Folgerungen," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 44(1/2), pages 91-102.
    6. Arndt Werner & Johanna Gast & Sascha Kraus, 2014. "The effect of working time preferences and fair wage perceptions on entrepreneurial intentions among employees," Small Business Economics, Springer, vol. 43(1), pages 137-160, June.

    More about this item

    Keywords

    comparison income; mobility; signaling; status; wages;

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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