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Unionism and Peer-Referencing

  • Panos, Georgios
  • Theodossiou, Ioannis
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    This study assesses the "fair-wage-effort" hypothesis, by examining (a) the relationship between relative wage comparisons and job satisfaction and quitting intensions, and (b) the relative ranking of stated effort inducing-incentives, in a novel dataset of unionised and non-unionised European employees. By distinguishing between downward and upward-looking wage comparisons, it is shown that wage comparisons to similar workers exert an asymmetric impact on the job satisfaction of union workers, a pattern consistent with inequity-aversion and conformism to the reference point. Moreover, union workers evaluate peer observation and good industrial relations more highly than payment and other incentives. In contrast, non-union workers are found to be more status-seeking in their satisfaction responses and less dependent on their peers in their effort choices The results are robust to endogenous union membership, considerations of generic loss aversion and across different tenure profiles. They are supportive of the individual egalitarian bias of collective wage determination and self-enforcing effort norms.

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    File URL: http://hdl.handle.net/1893/11875
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    Paper provided by University of Stirling, Division of Economics in its series Stirling Economics Discussion Papers with number 2010-03.

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    Date of creation: Feb 2010
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    Handle: RePEc:stl:stledp:2010-03
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    Division of Economics, University of Stirling, Stirling, Scotland FK9 4LA

    Phone: +44 (0)1786 467473
    Fax: +44 (0)1786 467469
    Web page: http://www.econ.stir.ac.uk/

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