Income Inequality and Job Satisfaction of Full-Time Employees in Germany

26 Pages Posted: 25 Apr 2006

See all articles by Christoph Wunder

Christoph Wunder

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - Department of Economics; University of Bamberg

Johannes Schwarze

University of Bamberg; German Institute for Economic Research (DIW Berlin); IZA Institute of Labor Economics

Date Written: April 2006

Abstract

Using data from the German Socio-Economic Panel Study (GSOEP), it is shown that income comparison with persons who are better off has a clear impact on the job satisfaction of West German full-time employees. Two contrary effects can be identified. On the one hand, there is an aversion to disadvantageous regional income inequality, while on the other hand, individuals prefer inequality within their occupational group. The two effects are interpreted as envy and an information (or "tunnel") effect, respectively. The analysis of income comparison with persons who are worse off suggests a prestige effect. However, downward comparison is of minor importance for job satisfaction.

Keywords: job satisfaction, income inequality, social comparison, envy, prestige

JEL Classification: D63, I31, D31

Suggested Citation

Wunder, Christoph and Schwarze, Johannes, Income Inequality and Job Satisfaction of Full-Time Employees in Germany (April 2006). IZA Discussion Paper No. 2084, Available at SSRN: https://ssrn.com/abstract=898588

Christoph Wunder (Contact Author)

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - Department of Economics ( email )

Lange Gasse 20
Nuernberg, D-90403
Germany

University of Bamberg ( email )

Feldkirchenstr. 21
Bamberg 96045
Germany

Johannes Schwarze

University of Bamberg ( email )

Kirschaeckerstrasse 39
Bamberg 96045
Germany
+49 951 863 2600 (Phone)
+49 951 863 5569 (Fax)

German Institute for Economic Research (DIW Berlin)

Mohrenstraße 58
Berlin, 10117
Germany

IZA Institute of Labor Economics

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

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
391
Abstract Views
1,990
rank
82,309
PlumX Metrics