Reference dependent preferences and the impact of wage increases on job satisfaction: theory and evidence

Arbeitspapier

The impact of wage increases on job satisfaction is explored theoretically and empirically. To do this, we apply a utility function that rises with the absolute wage level as well as with wage increases. It is shown that when employees can influence their wages by exerting effort, myopic utility maximization directly implies increasing and concave shaped wage profiles. Furthermore, employees get unhappier over time staying on a certain job although wages increase. Using data from 19 waves of the German Socio-Economic Panel we find empirical support for both the form of the utility function and the decreasing job satisfaction patterns.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IZA Discussion Papers ; No. 1879

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Personnel Economics: Labor Management ; Safety; Job Satisfaction; Related Public Policy ; Wages, Compensation, and Labor Costs: General ; Personnel Management; Executives; Executive Compensation
• Thema: job satisfaction ; wage increases ; wage profiles ; reference dependent utility ; habit formation ; loss aversion ; Lohnniveau ; Leistungsmotivation ; Nutzenfunktion ; Panel ; Schätzung ; Deutschland

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Grund, Christian ; Sliwka, Dirk
• Ereignis: Veröffentlichung
• (wer): Institute for the Study of Labor (IZA)
• (wo): Bonn
• (wann): 2005

Weitere Informationen

• Handle: http://hdl.handle.net/10419/33490
• Letzte Aktualisierung: 20.09.2024, 08:25 MESZ