Keeping up with the Joneses by finding a better-paid job - The effect of relative income on job mobility
It has been shown that a person’s relative income – compared to a reference group – has a negative impact on self-reported happiness. This suggests that people who aim at increasing their happiness should try to find a better-paid job if their relative income is low. In this paper we study this hypothesis by estimating the effect of relative income on job mobility, using a dataset containing information on roughly four million Dutch employees. We consider three different reference groups: people who live in the same neighborhood, people who work for the same employer, and people who share certain demographic characteristics. Our findings suggest that workers compare their own income to that of their neighbors, and low relative income is associated with higher job mobility. We conclude that low relative income (compared to the neighbors) reduces workers’ happiness, and workers react to this by finding a new job which may offer the prospect of higher pay.
|Date of creation:||08 Mar 2011|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
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.:
- Clark, Andrew E. & Oswald, Andrew J., 1994.
"Satisfaction and comparison income,"
CEPREMAP Working Papers (Couverture Orange)
- Clark, Andrew E. & Kristensen, Nicolai & Westergaard-Nielsen, Niels, 2008.
"Economic Satisfaction and Income Rank in Small Neighbourhoods,"
08-25, University of Aarhus, Aarhus School of Business, Department of Economics.
- 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).
- Andrew E. Clark & Nicolai Kristensen & Niels Westergård-Nielsen, 2008. "Economic satisfaction and income rank in small neighbourhoods," PSE Working Papers halshs-00586254, HAL.
- Andrew E. Clark & Niels Westergaard-Nielsen & Nicolai Kristensen, 2009. "Economic satisfaction and income rank in small neighbourhoods," Post-Print halshs-00754383, HAL.
- Veblen, Thorstein, 1899. "The Theory of the Leisure Class," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number veblen1899.
- 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.
- Bergin, Adele, 2009.
"Job Mobility in Ireland,"
RB2009/2/5, Economic and Social Research Institute (ESRI).
- Adele Bergin, 2008. "Job Mobility in Ireland," Economics, Finance and Accounting Department Working Paper Series n1940708.pdf, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
- 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.
- Thorstein Veblen, 1899. "Mr. Cummings's Strictures on "The Theory of the Leisure Class"," Journal of Political Economy, University of Chicago Press, vol. 8, pages 106-106.
- Linneman, Peter D. & Graves, Philip E., 1983.
"Migration and job change: a multinomial logit approach,"
19922, University Library of Munich, Germany.
- Linneman, Peter & Graves, Philip E., 1983. "Migration and job change: A multinomial logit approach," Journal of Urban Economics, Elsevier, vol. 14(3), pages 263-279, November.
- repec:pse:psecon:2008-44 is not listed on IDEAS
- Luttmer, Erzo F. P., 2004.
"Neighbors as Negatives: Relative Earnings and Well-Being,"
Working Paper Series
rwp04-029, Harvard University, John F. Kennedy School of Government.
- Erzo F. P. Luttmer, 2005. "Neighbors as Negatives: Relative Earnings and Well-Being," The Quarterly Journal of Economics, Oxford University Press, vol. 120(3), pages 963-1002.
- Erzo F.P. Luttmer, 2004. "Neighbors as Negatives: Relative Earnings and Well-Being," NBER Working Papers 10667, National Bureau of Economic Research, Inc.
- Veblen, Thorstein, 2009. "The Theory of the Leisure Class," OUP Catalogue, Oxford University Press, number 9780199552580 edited by Banta, Martha, December.
- repec:hal:wpaper:halshs-00586254 is not listed on IDEAS
- Kronenberg, Kristin & Carree, Martin, 2010. "Job and residential mobility in the Netherlands: the influence of human capital, household composition and location," MPRA Paper 25840, University Library of Munich, Germany.
- Becker, Gary S, 1981. "Altruism in the Family and Selfishness in the Market Place," Economica, London School of Economics and Political Science, vol. 48(189), pages 1-15, February.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:29426. 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: (Joachim Winter)
If references are entirely missing, you can add them using this form.