TY - JOUR AU - Card,David AU - Mas,Alexandre AU - Moretti,Enrico AU - Saez,Emmanuel TI - Inequality at Work: The Effect of Peer Salaries on Job Satisfaction JF - National Bureau of Economic Research Working Paper Series VL - No. 16396 PY - 2010 Y2 - September 2010 UR - http://www.nber.org/papers/w16396 L1 - http://www.nber.org/papers/w16396.pdf N1 - Author contact info: David Card Department of Economics 549 Evans Hall, #3880 University of California, Berkeley Berkeley, CA 94720-3880 Tel: 510/642-5222 Fax: 510/643-7042 E-Mail: card@econ.berkeley.edu Alexandre Mas Industrial Relations Section Firestone Library Princeton University Princeton, NJ 08544 Tel: 609/258-6374 E-Mail: amas@princeton.edu Enrico Moretti University of California, Berkeley Department of Economics 549 Evans Hall Berkeley, CA 94720-3880 Tel: 510/642 6649 Fax: 510/643 7042 E-Mail: moretti@econ.berkeley.edu Emmanuel Saez Department of Economics University of California, Berkeley 530 Evans Hall #3880 Berkeley, CA 94720 Tel: 510/642-4631 Fax: 510/642-6615 E-Mail: saez@econ.berkeley.edu M2 - featured in NBER digest on 2011-03-01 AB - We use a simple theoretical framework and a randomized manipulation of access to information on peers' wages to provide new evidence on the effects of relative pay on individual job satisfaction and job search intentions. A randomly chosen subset of employees of the University of California (UC) 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. Our information treatment doubles the fraction of employees using the website, with the vast majority of new users accessing data on the pay of colleagues in their own department. We find an asymmetric response to the information treatment: workers with salaries below the median for their pay unit and occupation report lower pay and job satisfaction, while those earning above the median report no higher satisfaction. Likewise, below-median earners report a significant increase in the likelihood of looking for a new job, while above-median earners are unaffected. Our findings suggest that job satisfaction depends directly on relative pay comparisons, and that this relationship is non-linear. ER -