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Negative reciprocity and retrenched pension rights

Author

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  • Montizaan Raymond
  • Cörvers Frank
  • Grip Andries de
  • Dohmen Thomas

    (ROA rm)

Abstract

We document the importance of negatively reciprocal inclinations in labor relationshipsby showing that a retrenchment of pension rights, which is perceived as unfair,causes a larger reduction in job motivation the stronger workers’ negatively reciprocalinclinations are. We exploit unique matched survey and administrative data on maleemployees in the public sector in the Netherlands and compare the job motivation ofemployees born in 1950, who faced a substantial retrenchment of their pension rightsresulting from a pension reform in 2006, to that of slightly older employees who remainentitled to more generous pension benefits. Job motivation is significantly lower amongnegatively reciprocal employees who were affected by the reform. The negative effecton job motivation is greater for negative reciprocal employees born very shortly afterthe cut-off date of January 1, 1950, as well as for those with many untreated colleagues,and who therefore arguably perceive the policy change as being more unfair. We alsofind that the treatment effect is stronger among workers who are more likely to holdtheir employer accountable for the drop in their pension rights, that is, those who workfor the national government.

Suggested Citation

  • Montizaan Raymond & Cörvers Frank & Grip Andries de & Dohmen Thomas, 2012. "Negative reciprocity and retrenched pension rights," ROA Research Memorandum 015, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  • Handle: RePEc:unm:umaror:2012015
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    Cited by:

    1. Jones, Matthew T., 2014. "Strategic complexity and cooperation: An experimental study," Journal of Economic Behavior & Organization, Elsevier, vol. 106(C), pages 352-366.
    2. Montizaan R.M. & Grip A. de & Fouarge D., 2015. "Training access, reciprocity, and expected retirement age," Research Memorandum 005, Maastricht University, Graduate School of Business and Economics (GSBE).
    3. Andries de Grip & Didier Fouarge & Raymond Montizaan, 2013. "How Sensitive are Individual Retirement Expectations to Raising the Retirement Age?," De Economist, Springer, vol. 161(3), pages 225-251, September.
    4. Dohmen, Thomas, 2014. "Behavioral labor economics: Advances and future directions," Labour Economics, Elsevier, vol. 30(C), pages 71-85.
    5. Sander Gerritsen, 2014. "Zero returns to compulsory schooling: Is it certification or skills that matters?," CPB Discussion Paper 293, CPB Netherlands Bureau for Economic Policy Analysis.
    6. Ayse Gül Mermer & Wieland Müller & Sigrid Suetens, 2016. "Cooperation in Indefinitely Repeated Games of Strategic Complements and Substitutes," Vienna Economics Papers 1603, University of Vienna, Department of Economics.

    More about this item

    Keywords

    labour economics ;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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