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

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

No 3073, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper uses 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 contrary to a large literature which has found evidence of income comparisons in subjective well-being. We argue that the difference hinges on the nature of the reference group. We here use co-workers. Their wages not only induce jealousy, but also provide a signal about the worker’s own future earnings. Our positive estimated coefficient on others’ wages shows that this positive future earnings signal outweighs any negative status effect. This phenomenon is stronger for men, and in the private sector.

Keywords: comparison income; co-workers; tournaments; wage expectations; job satisfaction (search for similar items in EconPapers)
JEL-codes: C23 C25 D84 J28 J31 J33 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2007-09
New Economics Papers: this item is included in nep-bec, nep-cbe, nep-hap and nep-lab
References: Add references at CitEc
Citations: View citations in EconPapers (19) Track citations by RSS feed

Published in: Economic Journal, 2009, 119 (536), 430–447

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http://ftp.iza.org/dp3073.pdf (application/pdf)

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