Pay Growth, Fairness and Job Satisfaction: Implications for Nominal and Real Wage Rigidity

Jennifer Smith ()

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: Theories of wage rigidity often rely on a positive relationship between pay changes and utility, arising from concern for fairness or gift exchange. Supportive evidence has emerged from laboratory experiments, but the link has not yet been established witheld data. This paper contributes a ?rst step, using representative British data. Workers care about the level and the growth of earnings. Below-median wage increases lead to an insult e¤ect except when similar workers have real wage reductions or ?rm production is falling. Nominal pay cuts appear insulting even when the ?rm is doing badly.

Keywords: Pay cuts; Social comparisons; Gift exchange (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-hap, nep-hme and nep-hrm
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Citations: View citations in EconPapers (2)

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http://www2.warwick.ac.uk/fac/soc/economics/resear ... s/130-2013_smith.pdf

Related works:
Journal Article: Pay Growth, Fairness, and Job Satisfaction: Implications for Nominal and Real Wage Rigidity (2015)
Working Paper: Pay Growth, Fairness and Job Satisfaction: Implications for Nominal and Real Wage Rigidity (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:cge:wacage:130

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