Smith, Jennifer C. (2013) Pay growth, fairness and job satisfaction : implications for nominal and real wage rigidity. Working Paper. Coventry, UK: University of Warwick, Department of Economics. Warwick economics research papers series (TWERPS), Volume 2013 (Number 1009).

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Abstract

Theories of wage rigidity often rely on a positive relationship between pay changes and utility, arising from concern for fairness or gift exchange. Supportive evidence has emerged from laboratory experiments, but the link has not yet been established with field data. This paper contributes a first step, using representative British data. Workers care about the level and the growth of earnings. Below-median wage increases lead to an insult effect except when similar workers have real wage reductions or frm production is falling. Nominal pay cuts appear insulting even when the firm is doing badly.

Item Type:	Working or Discussion Paper (Working Paper)
Subjects:	H Social Sciences > HB Economic Theory
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	Wages , Cost and standard of living , Economics -- Sociological aspects, Employees -- Social conditions
Series Name:	Warwick economics research papers series (TWERPS)
Publisher:	University of Warwick, Department of Economics
Place of Publication:	Coventry, UK
Official Date:	2013
Dates:	Date Event 2013 Published
Volume:	Volume 2013
Number:	Number 1009
Number of Pages:	34
Institution:	University of Warwick
Status:	Not Peer Reviewed
Access rights to Published version:	Open Access
Related URLs:	Related item in WRAP

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