Wage comparisons in and out of the firm. Evidence from a matched employer–employee French database

Olivier Godechot and Claudia Senik ()

Journal of Economic Behavior & Organization, 2015, vol. 117, issue C, 395-410

Abstract: This paper looks at the association between wage satisfaction and other people's pay, based on a matched employer–employee dataset. Three notions of reference wage appear to be being of particular importance: (i) the median wage level in one's firm, (ii) the level of wage of similar workers in the region, and (iii) the top 1% wage in one's firm. The first one triggers a signal effect, whereby all employees – especially young ones – whatever their relative position in the firm, are happier the higher the median wage in their firm, holding their own wage constant. The second and the third ones are sources of relative deprivation, i.e. workers’ satisfaction decreases with the gap between their own salary and these reference categories. These findings are based on objective measures of earnings as well as subjective declarations about wage satisfaction, awareness of other people's pay and reported income comparisons.

Keywords: Income comparisons; Distribution; Job satisfaction; Wage satisfaction; Signal effect; Matched employer–employee survey data (search for similar items in EconPapers)
JEL-codes: D31 D63 I30 J28 J31 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (35)

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Related works:
Working Paper: Wage Comparisons in and out of the Firm. Evidence from a Matched Employer-Employee French Database (2013)
Working Paper: Wage Comparisons in and out of the Firm. Evidence from a Matched Employer-Employee French Database (2013)
Working Paper: Wage Comparisons in and out of the Firm. Evidence from a Matched Employer-Employee French Database (2013)
Working Paper: Wage comparisons in and out of the firm. Evidence from a matched employer-employee French database (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:117:y:2015:i:c:p:395-410

DOI: 10.1016/j.jebo.2015.07.003

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