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Status in the Workplace: Evidence from M&A

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  • Illoong Kwon
  • Eva Meyersson Milgrom

Abstract

Using mergers and acquisitions as a natural experiment, this paper analyzes how changes in workers?status in the workplace affect their turnover decisions. The evidence suggests that workers have different preferences for status depending on reference group. When compared with co-workers in the same occupation, workers positively value their status. However, when compared with workers in other occupations in the same firm, workers negatively value their status. Workers seem to give up absolute wage increase for higher status within occupation, which suggests that preference for status stems from status?social value, not from its instrumental value for future income.

Suggested Citation

  • Illoong Kwon & Eva Meyersson Milgrom, 2007. "Status in the Workplace: Evidence from M&A," Discussion Papers 07-01, University at Albany, SUNY, Department of Economics.
  • Handle: RePEc:nya:albaec:07-01
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    File URL: http://www.albany.edu/economics/research/workingp/2007/Status.pdf
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    References listed on IDEAS

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    1. Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1993. "Long-term earnings losses of high-seniority displaced workers," Economic Perspectives, Federal Reserve Bank of Chicago, issue Nov, pages 2-20.
    2. Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
    3. Farber, Henry S, 1994. "The Analysis of Interfirm Worker Mobility," Journal of Labor Economics, University of Chicago Press, vol. 12(4), pages 554-593, October.
    4. Fershtman, Chaim & Murphy, Kevin M & Weiss, Yoram, 1996. "Social Status, Education, and Growth," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 108-132, February.
    5. Sendhil Mullainathan & Marianne Bertrand, 2001. "Do People Mean What They Say? Implications for Subjective Survey Data," American Economic Review, American Economic Association, vol. 91(2), pages 67-72, May.
    6. Daniel J. Zizzo & Andrew J. Oswald, 2001. "Are People Willing to Pay to Reduce Others'Incomes?," Annals of Economics and Statistics, GENES, issue 63-64, pages 39-65.
    7. Galizzi, Monica & Lang, Kevin, 1998. "Relative Wages, Wage Growth, and Quit Behavior," Journal of Labor Economics, University of Chicago Press, vol. 16(2), pages 367-391, April.
    8. repec:adr:anecst:y:2001:i:63-64:p:04 is not listed on IDEAS
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    Cited by:

    1. Bartling, Björn & von Siemens, Ferdinand A., 2010. "The intensity of incentives in firms and markets: Moral hazard with envious agents," Labour Economics, Elsevier, vol. 17(3), pages 598-607, June.
    2. Axel Ockenfels & Dirk Sliwka & Peter Werner, 2015. "Bonus Payments and Reference Point Violations," Management Science, INFORMS, vol. 61(7), pages 1496-1513, July.
    3. David Card & Alexandre Mas & Enrico Moretti & Emmanuel Saez, 2012. "Inequality at Work: The Effect of Peer Salaries on Job Satisfaction," American Economic Review, American Economic Association, vol. 102(6), pages 2981-3003, October.

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