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American Economic Review: Vol. 102 No. 6 (October 2012)

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Inequality at Work: The Effect of Peer Salaries on Job Satisfaction

Article Citation

Card, David, Alexandre Mas, Enrico Moretti, and Emmanuel Saez. 2012. "Inequality at Work: The Effect of Peer Salaries on Job Satisfaction." American Economic Review, 102(6): 2981-3003.

DOI: 10.1257/aer.102.6.2981

Abstract

We study the effect of disclosing information on peers' salaries on workers' job satisfaction and job search intentions. A randomly chosen subset of University of California employees was informed about a new website listing the pay of University employees. All employees were then surveyed about their job satisfaction and job search intentions. Workers with salaries below the median for their pay unit and occupation report lower pay and job satisfaction and a significant increase in the likelihood of looking for a new job. Above-median earners are unaffected. Differences in pay rank matter more than differences in pay levels. (JEL I23, J28, J31, J64)

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Authors

Card, David (U CA, Berkeley)
Mas, Alexandre (Princeton U)
Moretti, Enrico (U CA, Berkeley)
Saez, Emmanuel (U CA, Berkeley)

JEL Classifications

I23: Higher Education and Research Institutions
J28: Safety; Job Satisfaction; Related Public Policy
J31: Wage Level and Structure; Wage Differentials
J64: Unemployment: Models, Duration, Incidence, and Job Search


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