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

Author

Listed:
  • Olivier Godechot

    (Sciences Po, MaxPo and OSC-CNRS)

  • Claudia Senik

    (University Paris-Sorbonne and PSE)

Abstract
This paper looks at the association between wage satisfaction and different notions of reference wage, based on a matched employer-employee dataset. It shows that workers’ satisfaction depends on other-people’s income in different ways. Relative income concerns are important, but we also find robust evidence of signal effects. For instance, workers are happier the higher the median wage in their firm, holding their own wage constant. This is true of all employees, whatever their relative position in the firm. This signal effect is stronger for young people and for women. These findings are based on objective measures of earnings as well as subjective declarations about wage satisfaction, awareness of other people’s wage and reported income comparisons.

Suggested Citation

  • Olivier Godechot & Claudia Senik, 2013. "Wage comparisons in and out of the firm. Evidence from a matched employer-employee French database," Working Papers 311, ECINEQ, Society for the Study of Economic Inequality.
    • Handle: RePEc:inq:inqwps:ecineq2013-311
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    File URL: http://www.ecineq.org/milano/WP/ECINEQ2013-311.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Income comparisons; income distribution; job satisfaction; wage satisfaction; signal effect; matched employer-employee survey data.;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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