Social Comparisons of Wage Increases and Job Satisfaction

17 Pages Posted: 18 Jul 2016

See all articles by Christian Grund

Christian Grund

RWTH Aachen University - School of Economics and Business Administration; IZA Institute of Labor Economics

Maike Rubin

RWTH Aachen University

Abstract

We combine status quo and social comparison considerations and investigate whether relative wage increases in the sense of differences between individual wage increases and wage increases of comparable employees are related to managers' job satisfaction. Using a panel data set of managers in the German chemical industry, we indeed find first evidence. The relation between relative wage increases and job satisfaction is relevant for managers with lower absolute wage levels in particular.

Keywords: job satisfaction, reference points, social comparisons, status quo preferences, wage increases

JEL Classification: M52, J28, J31

Suggested Citation

Grund, Christian and Rubin, Maike, Social Comparisons of Wage Increases and Job Satisfaction. IZA Discussion Paper No. 10038. Available at SSRN: https://ssrn.com/abstract=2810449

Christian Grund (Contact Author)

RWTH Aachen University - School of Economics and Business Administration ( email )

Aachen
Germany

IZA Institute of Labor Economics

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

Maike Rubin

RWTH Aachen University

Templergraben 55
52056 Aachen, 52056
Germany

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