Reference dependent preferences and the impact of wage increases on job satisfaction
Subtitle: theory and evidence
By: by Christian Grund, Dirk Sliwka.
Contributors: Sliwka, Dirk.
Series: Discussion paper ;; no. 1879; Discussion paper (Forschungsinstitut zur Zukunft der Arbeit : Online) ;; no. 1879
Publisher: IZA
Published: 2005
Place of publication: Bonn, Germany
Language: eng
Format: Electronic resource
Subjects: Job satisfaction -- Germany.; Wages -- Germany.
Description: "The impact of wage increases on job satisfaction is explored theoretically and empirically. To do this, we apply a utility function that rises with the absolute wage level as well as with wage increases. It is shown that when employees can influence their wages by exerting effort, myopic utility maximization directly implies increasing and concave shaped wage profiles. Furthermore, employees get unhappier over time staying on a certain job although wages increase. Using data from 19 waves of the German Socio-Economic Panel we find empirical support for both the form of the utility function and the decreasing job satisfaction patterns"--Forschungsinstitut zur Zukunft der Arbeit web site.
Notes: Includes bibliographical references.
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