Wage comparisons in and out of the firm
Journal article: This paper looks at the association between wage satisfaction and other people's pay, based on a matched employer–employee dataset. Three notions of reference wage appear to be being of particular importance: (i) the median wage level in one's firm, (ii) the level of wage of similar workers in the region, and (iii) the top 1% wage in one's firm. The first one triggers a signal effect, whereby all employees – especially young ones – whatever their relative position in the firm, are happier the higher the median wage in their firm, holding their own wage constant. The second and the third ones are sources of relative deprivation, i.e. workers’ satisfaction decreases with the gap between their own salary and these reference categories. These findings are based on objective measures of earnings as well as subjective declarations about wage satisfaction, awareness of other people's pay and reported income comparisons.
Author(s)
Olivier Godechot, Claudia Senik
Journal
- Journal of Economic Behavior and Organization
Date of publication
- 2015
Keywords JEL
Keywords
- Matched employer–employee survey data
- Income comparisons
- Distribution
- Job satisfaction
- Wage satisfaction
- Signal effect
- Matched employer
- Employee survey data
Internal reference
- 2441/9labe9r4se65i78968603e92m
Pages
- 395 – 410
URL of the HAL notice
Version
- 1
Volume
- 117