Negative Reciprocity and Retrenched Pension Rights

41 Pages Posted: 1 Nov 2013

See all articles by Raymond Michel Montizaan

Raymond Michel Montizaan

Maastricht University - Department of Accounting and Information Management

Frank Cörvers

Maastricht University

Andries de Grip

Maastricht School of Business and Economics; IZA Institute of Labor Economics

Thomas J. Dohmen

Institute for the Study of Labor (IZA); Maastricht University - Business Investment Research Center (BIRC)

Multiple version iconThere are 2 versions of this paper

Date Written: May 31, 2013

Abstract

We document the importance of negatively reciprocal inclinations in labor relationships by showing that a retrenchment of pension rights, which is perceived as unfair, causes a larger reduction in job motivation the stronger workers’ negatively reciprocal inclinations are. We exploit unique matched survey and administrative data on male employees in the public sector in the Netherlands and compare the job motivation of employees born in 1950, who faced a substantial retrenchment of their pension rights resulting from a pension reform in 2006, to that of slightly older employees who remain entitled to more generous pension benefits. Job motivation is significantly lower among negatively reciprocal employees who were affected by the reform. The adverse effect on job motivation is greater for negative reciprocal employees born very shortly after the cut-off date of January 1, 1950, as well as for those with many untreated colleagues who perceive the policy change as being more unfair. We also find that the treatment effect is stronger among workers who are more likely to hold their employer accountable for the drop in their pension rights, that is, those who work for the national government which initiated the pension reform.

Keywords: Reciprocity, job motivation, retrenchment of pension rights

JEL Classification: D63, J2

Suggested Citation

Montizaan, Raymond Michel and Corvers, Frank and de Grip, Andries and Dohmen, Thomas, Negative Reciprocity and Retrenched Pension Rights (May 31, 2013). Netspar Discussion Paper No. 05/2013-040. Available at SSRN: https://ssrn.com/abstract=2347995 or http://dx.doi.org/10.2139/ssrn.2347995

Raymond Michel Montizaan

Maastricht University - Department of Accounting and Information Management ( email )

Netherlands

Frank Corvers

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands

Andries De Grip

Maastricht School of Business and Economics ( email )

P. O. Box 616
Maastricht, NL 6200 MD
Netherlands

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Thomas Dohmen (Contact Author)

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Maastricht University - Business Investment Research Center (BIRC) ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31-43-388 3832 (Phone)
+31-43-388 4856 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
28
Abstract Views
482
PlumX Metrics