Employee identification and wages – on the economics of “Affective Commitment”

Patrick Kampkötter, Lea M. Petters and Dirk Sliwka

Journal of Economic Behavior & Organization, 2021, vol. 188, issue C, 608-626

Abstract: We study the role of employees’ identification to the employer for wage growth. We first show in a formal model that identification implies countervailing effects: Employees with higher identification are more valuable as they exert higher efforts, but have weaker bargaining positions, and less outside options as they search less. Analyzing a novel representative panel dataset, we find that stronger identification is associated with less job search and turnover. Workers that have higher identification exhibit significantly lower wage growth. In line with the model, this pattern tends to be reversed conditional on having obtained an external offer.

Keywords: Wage; Affective commitment; Identity; Turnover; Job search (search for similar items in EconPapers)
JEL-codes: J31 M50 M52 (search for similar items in EconPapers)
Date: 2021
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Working Paper: Employee Identification and Wages: On the Economics of 'Affective Commitment' (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:188:y:2021:i:c:p:608-626

DOI: 10.1016/j.jebo.2021.05.036

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