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Title:The Further We Stretch the Higher the Sky: On the Impact of Wage Increases on Job Satisfaction PDF Logo
Authors:Grund, Christian
Sliwka, Dirk
Issue Date:2003
Series/Report no.:Bonn econ discussion papers 2003,1
Abstract:The impact of wage increases on job satisfaction is explored. First, it is empirically confirmed that current job satisfaction rises with the absolute wage level as well as with wage increases. Second, a basic job satisfaction function is constructed based on the empirical results, and theoretical implications are analyzed. Myopic maximization of such a function directly implies increasing and concave shaped wage profiles. It is shown that employees get unhappier over time staying on a certain job although wages increase, which again is empirically confirmed.
Subjects:Job satisfaction
Wage increases
Habit formation
Wage profiles
Relative utility
JEL:M12
J28
M54
J30
Document Type:Working Paper
Appears in Collections:Bonn Econ Discussion Papers, Bonn Graduate School of Economics (BGSE), Universität Bonn

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