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

Jennifer C Smith
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Jennifer C Smith: Department of Economics, University of Warwick

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

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 with field data. This paper contributes a fist step, using representative British data. Workers care about the level and the growth of earnings. Below-median wage increases lead to an insult effect except when similar workers have real wage reductions or fim production is falling. Nominal pay cuts appear insulting even when the firm is doing badly. JEL classification: Pay cuts ; Social comparisons ; Gift exchange JEL codes: J33 ; M52 ; J28 ; E24

Date: 2013
New Economics Papers: this item is included in nep-hme, nep-hrm, nep-lab and nep-lma
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Citations: View citations in EconPapers (3)

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https://warwick.ac.uk/fac/soc/economics/research/w ... /2013/twerp_1009.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:wrk:warwec:1009

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