Income Inequality and Job Satisfaction of Full-Time Employees in Germany

Christoph Wunder () and Johannes Schwarze
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Christoph Wunder: Martin-Luther University, Halle-Wittenberg
Johannes Schwarze: University of Bamberg

No 2084, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Using data from the German Socio-Economic Panel Study (GSOEP), it is shown that income comparison with persons who are better off has a clear impact on the job satisfaction of West German full-time employees. Two contrary effects can be identified. On the one hand, there is an aversion to disadvantageous regional income inequality, while on the other hand, individuals prefer inequality within their occupational group. The two effects are interpreted as envy and an information (or “tunnel”) effect, respectively. The analysis of income comparison with persons who are worse off suggests a prestige effect. However, downward comparison is of minor importance for job satisfaction.

Keywords: social comparison; German Socio-Economic Panel Study (GSOEP); prestige; envy; job satisfaction; income inequality; information effect (tunnel effect) (search for similar items in EconPapers)
JEL-codes: D31 D63 I31 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2006-04
New Economics Papers: this item is included in nep-bec
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Citations: View citations in EconPapers (3)

Published - published in: Journal of Income Distribution, 2009, 18(2), 70-91

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