Income Inequality and Job Satisfaction of Full-Time Employees in Germany
26 Pages Posted: 25 Apr 2006
Date Written: April 2006
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: Suggested Citation