Job Satisfaction and Co-worker Wages: Status or Signal?

Andrew Clark (), Nicolai Kristensen () and Niels Westergård-Nielsen

Economic Journal, 2009, vol. 119, issue 536, pages 430-447

Abstract: We use matched employer-employee panel data to show that individual job satisfaction is higher when other workers in the same establishment are better-paid. This runs counter to substantial existing evidence of income comparisons in subjective well-being. We argue that the difference hinges on the nature of the reference group. Here we use co-workers. Their earnings not only induce jealousy but also provide a signal about the worker's own future earnings. In our data, this positive future earnings signal outweighs any negative status effect. This phenomenon is stronger for men and in the private sector but weaker for those nearer retirement. Copyright © The Author(s). Journal compilation © Royal Economic Society 2009.

Date: 2009
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Related works:
Working Paper: Job Satisfaction and Co-worker Wages: Status or Signal? (2007)
Working Paper: Job satisfaction and co-worker wages: Status or signal? (2007)
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