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Employee Identification and Wages: On the Economics of 'Affective Commitment'

Author

Listed:
  • Kampkötter, Patrick

    (University of Tübingen)

  • Petters, Lea

    (University of Cologne)

  • Sliwka, Dirk

    (University of Cologne)

Abstract
We study the role of employees' identification to the employer for wage growth. We first show in a formal model that identification implies countervailing effects: Employees with higher identification are more valuable as they exert higher efforts, but have weaker bargaining positions, and less outside options as they search less. Analyzing a novel representative panel dataset, we find that stronger identification is associated with less job search and turnover. Workers that have higher identification exhibit significantly lower wage growth. In line with the model, this pattern tends to be reversed conditional on having obtained an external offer.

Suggested Citation

  • Kampkötter, Patrick & Petters, Lea & Sliwka, Dirk, 2020. "Employee Identification and Wages: On the Economics of 'Affective Commitment'," IZA Discussion Papers 13624, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp13624
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    More about this item

    Keywords

    turnover; identity; affective commitment; wage; job search;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • M50 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - General
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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