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The Effects of Status Concerns on Labor Markets for Different Types of Workers

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  • Schottke, Alessa K.
  • Siemering, Christian

Abstract

Based on people's ambition to be viewed as intelligent and the findings on social status and social identity we assume that higher education is associated with high social esteem. We incorporate these findings into people's educational decision and aim to explore the effects of status concerns on labor supply, wages and production. We discover that social status associated with higher education induces more workers to attend the higher educational path. In turn, labor supply of highly educated workers increases, which decreases the respective wage in equilibrium. Moreover, the wage for less educated workers increases in status concerns. There is a unique level of status concerns maximizing the product market's output. Whether production increases or decreases in status concerns depends on whether this level is exceeded or not.

Suggested Citation

  • Schottke, Alessa K. & Siemering, Christian, 2018. "The Effects of Status Concerns on Labor Markets for Different Types of Workers," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181601, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc18:181601
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    References listed on IDEAS

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    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values

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