Status in the Workplace: Evidence from M&A
43 Pages Posted: 30 Jan 2010 Last revised: 2 Feb 2010
Date Written: October 1, 2009
Abstract
Using exogenous changes in workers’ relative wages during mergers and acquisitions (M&As), this paper analyzes how changes in workers’ relative wages, or status, in the workplace affect their turnover decisions. Evidence suggests that workers not only care about their status, but also have different preferences for status depending on the reference group. Moreover, those workers who experience an increase in their status within occupation due to an M&A, have lower turnover rates and lower wage growth rates than others. This suggests that workers prefer higher status even when it does not necessarily lead to higher wages.
Keywords: Status, Relative Wage, Turnover
JEL Classification: A14, D03, J60
Suggested Citation: Suggested Citation
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