Keeping up by working more: Evidence from a survey experiment on status-driven labor supply

Daniel Obst

No 53, ifso working paper series from University of Duisburg-Essen, Institute for Socioeconomics (ifso)

Abstract: Many employees work more than they would prefer. This paper examines whether social comparisons contribute to this mismatch by inducing individuals to prioritize income over leisure. I use a within-subject survey experiment with university students in which participants repeatedly choose between higher income and reduced working hours under two conditions: one where their choice affects relative income and one where it does not. When upward comparisons are present, the share choosing higher income rises from 36% to 47%, consistent with status concerns driving longer working hours. The design mirrors a prisoner's dilemma: individuals prefer shorter hours but work more to avoid falling behind in income. When the additional income is tied to specific spending categories, the strongest increases in choosing higher income occur for clothing and shoes, food, education, health, and private pension plans-indicating that status concerns extend beyond conspicuous consumption to include long-term investments. Consistent with an established measure of status sensitivity (Solnick & Hemenway, 1998), status-oriented individuals respond more strongly to relative income cues. These findings suggest that labor supply decisions can exhibit positional externalities, with implications for working-time coordination and employee wellbeing

Keywords: social comparisons; labor supply; working time preferences; status competition; positional externalities; income inequality (search for similar items in EconPapers)
JEL-codes: C83 C99 D31 D91 J22 J31 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-exp, nep-lma and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifsowp:325831

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