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Employee Identification and Wages: On the Economics of "Affective Commitment"

Patrick Kampkötter (), Lea Petters and Dirk Sliwka ()
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Lea Petters: University of Cologne
Dirk Sliwka: University of Cologne

No 13624, IZA Discussion Papers from Institute of Labor Economics (IZA)

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)
Pages: 43 pages
Date: 2020-08
New Economics Papers: this item is included in nep-hrm and nep-lma
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