Self-Esteem and Labour Market Choices
45 Pages Posted: 2 Feb 2005
We assume that people have beliefs about their abilities, that these generate self-esteem, and that self-esteem is valued intrinsically. We consider the implications for an individual's incentive to manage their self-esteem in the labour market. Employing a model of labour market search with Bayesian updating, we show that a self-esteem sensitive individual has an incentive to avoid the situation (in avoiding the truth), self-handicap (in avoiding the truth without avoiding search), to employ downward comparison (in manipulating the truth), and engage in defensive pessimism (in avoiding materially damaging strategies like self-handicapping).
Keywords: Self-esteem, search, labour market
JEL Classification: D83, J64
Suggested Citation: Suggested Citation