Misery Loves Company: Exogenous Shocks in Retirement Expectations and Social Comparison Effects on Subjective Well-Being

Raymond Montizaan and Maarten Vendrik

No 6863, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This study investigates the effects of social comparisons accompanying a substantial reform of the Dutch pension system on the job satisfaction of workers who are close to retirement. The reform implies that public sector workers born on January 1, 1950, or later face a substantial reduction in their pension rights, while workers born before this threshold date can still retire under the old, more generous rules. Using unique matched survey and administrative panel data on male public sector workers born in 1949 and 1950, we find strong and persistent effects on job satisfaction that are sizable compared to income effects on well-being. The drop in satisfaction is strongly affected by social comparisons with colleagues. Treated workers are less affected by the reform when the treatment group is larger in the organization where they are employed. Moreover, the social comparison effect is especially prevalent in organizations that stimulate their employees to work in teams. We also find evidence that workers compare their own replacement rate with the average replacement of comparable individuals in their organization, but the major part of the social comparison effect is non-monetary.

Keywords: retirement; social comparison; well-being (search for similar items in EconPapers)
JEL-codes: D1 D63 I3 J26 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2012-09
New Economics Papers: this item is included in nep-age, nep-eur and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published - published in: Journal of Economic Behavior and Organization, 2014, 97, 1-26

Downloads: (external link)
https://docs.iza.org/dp6863.pdf (application/pdf)

Related works:
Journal Article: Misery Loves Company: Exogenous shocks in retirement expectations and social comparison effects on subjective well-being (2014)
Working Paper: Misery loves company: exogenous shocks in retirement expectations and social comparison effects on subjective well-being (2012)
Working Paper: Misery loves company: exogenous shocks in retirement expectations and social comparison effects on subjective well-being (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp6863

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().