Artikel
Within-establishment wage inequality and satisfaction
The aim of this paper is to provide fresh empirical evidence on the mechanisms through which wage inequality affects worker satisfaction.Theoretically, the wages of others may affect workers' utility for two main reasons: Workers may derive well-being from their social status (the comparison effect) and/or they may use others' wages to help predict their own future wage (the information effect). The author tests both hypotheses. To do this, she models individual utility from pay as a function of a workers own wage and the earnings of all other workers within the same establishment, and she estimates the model using matched British employeremployee data. The author assumes incomplete information about others' wages. She finds that the comparison effect matters. Interestingly, she also provides some evidence on a positive relation between well-being and inequality. Her results are robust to different specifications and different definitions of the reference group.
- Language
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Englisch
- Bibliographic citation
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Journal: Economics: The Open-Access, Open-Assessment E-Journal ; ISSN: 1864-6042 ; Volume: 8 ; Year: 2014 ; Issue: 2014-4 ; Pages: 1-21 ; Kiel: Kiel Institute for the World Economy (IfW)
Single Equation Models; Single Variables: Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
Safety; Job Satisfaction; Related Public Policy
Wage Level and Structure; Wage Differentials
Compensation Packages; Payment Methods
comparison income
co-workers
inequality
incomplete information
- DOI
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doi:10.5018/economics-ejournal.ja.2014-4
- Handle
- Last update
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12.07.2024, 1:24 PM CEST
Object type
- Artikel
Associated
- Poggi, Ambra
- Kiel Institute for the World Economy (IfW)
Time of origin
- 2014