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Wage Satisfaction and Reference Wages

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Handbook of Labor, Human Resources and Population Economics

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Abstract

That wage satisfaction depends on reference wage is now an acquis of the empirical happiness literature. Employees care about their coworkers’ wage. They compare to different notions of reference wage and suffer from disadvantageous comparisons, more than they enjoy advantageous ones. However, reference wage sometimes acts in a positive way, as a carrier of information. In terms of methods, the empirical literature has developed in three stages. First, it started by enquiring about the statistical association between a notion of reference wage (or reference income) as defined by researchers, and self-declared satisfaction. Second, some researchers tried to elicit the direction of income comparisons by including direct questions in large surveys of the population. Third, researchers attempted to provide experimental evidence of the causal effect of comparisons on satisfaction (beyond the simple statistical association) using natural, field, and lab experiments.

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Acknowledgments

Responsible Section Editor: Milena Nikolova

The chapter has benefitted from valuable comments of the editors and anonymous referees, as well as the research assistance of Anique Ahmed. Financial support by the French National Research Agency, through the Investissements d’avenir framework ANR-17-EURE-0001 is gratefully noted.

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Authors and Affiliations

  1. Sorbonne University and Paris School of Economics, Paris, France

    Claudia Senik

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  1. Claudia Senik
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Correspondence to Claudia Senik .

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Editors and Affiliations

  1. UNU-MERIT & Princeton University, Maastricht, The Netherlands

    Klaus F. Zimmermann

Section Editor information

  1. Faculty of Economics and Business, Global Economics and Management, University of Groningen, Groningen, The Netherlands

    Milena Nikolova

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Senik, C. (2021). Wage Satisfaction and Reference Wages. In: Zimmermann, K.F. (eds) Handbook of Labor, Human Resources and Population Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-57365-6_180-2

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  • DOI: https://doi.org/10.1007/978-3-319-57365-6_180-2

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  • Print ISBN: 978-3-319-57365-6

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Chapter history

  1. Latest

    Wage Satisfaction and Reference Wages
    Published:
    11 March 2021

    DOI: https://doi.org/10.1007/978-3-319-57365-6_180-2

  2. Original

    Wage Satisfcaction and Reference Wages
    Published:
    24 February 2021

    DOI: https://doi.org/10.1007/978-3-319-57365-6_180-1

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