Skip to main content
Article thumbnail
Location of Repository

Unionism and peer-referencing

By Georgios Panos and Ioannis Theodossiou


This study assesses the “fair-wage-effort” hypothesis, by examining (a) the relationship between relative wage comparisons and job satisfaction and quitting intensions, and (b) the relative ranking of stated effort inducing-incentives, in a novel dataset of unionised and non-unionised European employees. By distinguishing between downward and upward-looking wage comparisons, it is shown that wage comparisons to similar workers exert an asymmetric impact on the job satisfaction of union workers, a pattern consistent with inequity-aversion and conformism to the reference point. Moreover, union workers evaluate peer observation and good industrial relations more highly than payment and other incentives. In contrast, non-union workers are found to be more status-seeking in their satisfaction responses and less dependent on their peers in their effort choices The results are robust to endogenous union membership, considerations of generic loss aversion and across different tenure profiles. They are supportive of the individual egalitarian bias of collective wage determination and self-enforcing effort norms.EPICURUS, a project supported by the European Commission through the 5th Framework Programme “Improving Human Potential” (contract number: HPSE-CT-2002-00143

Topics: Unions, Peers, Inequity aversion, Conformism
Publisher: University of Aberdeen
Year: 2010
OAI identifier:

Suggested articles


  1. (1991). A Behavioral Theory of Labor Negotiations: An Analysis of a Social Interaction System. 2nd Edition. doi
  2. (2001). A Closer Look at the Relationship between Justice Perceptions and Union Participation”. doi
  3. (1996). A New Data Set Measuring Income Inequality”. The World Bank Economic Review. doi
  4. (1992). A Simple Model of Herd Behavior”. doi
  5. (1957). A Theory of Cognitive Dissonance. doi
  6. (1994). A Theory of Conformity”.
  7. (1992). A Theory of Fads, Fashion, Custom, and Cultural Change as Informational Cascades”. doi
  8. (1999). A Theory of Fairness, Competition and Cooperation”. doi
  9. (1980). A Theory of Social Custom of Which Unemployment May Be One Consequence”. doi
  10. (1992). Advances in Prospect Theory: Cumulative Representation of Uncertainty”. doi
  11. (1984). Are Workers Paid Their Marginal Products?”
  12. (2000). Choices, Values and Frames. Russell Sage Foundation: doi
  13. (1985). Choosing the Right Pond: Human Behavior and the Quest for Status. doi
  14. (2003). Coherent Arbitrariness: Stable Demand Curves Without Stable Preferences”. doi
  15. (1999). Collective Action as a Social Exchange”, doi
  16. (2007). Comparison Wage in Trade Union Decision Making”. Working Paper. doi
  17. (1998). Comparison-Concave Utility and Following Behaviour in Social and Economic Settings”. doi
  18. (1988). Compensation and Incentives: Practice vs. doi
  19. (1974). Conditional Logit Analysis of Qualitative Choice Behaviour”.
  20. (1980). Costly Optimizers Versus Cheap Imitators”. doi
  21. (2004). Customer Satisfaction Pays Off Rewards Can Motivate Employees to Deliver TopNotch Customer Service”,
  22. (1997). Diverging Male Wage Inequality in the United States and Canada, doi
  23. (2005). Do Co-Worker Wages Matter? Theory and Evidence on Wage Secrecy, Wage Compression and Effort”.
  24. (1978). Dummy Endogenous Variables in a Simultaneous Equation System”. doi
  25. (1992). Economics, Organization and Management. Englewood Cliffs:
  26. (1951). Effects of Group Pressure Upon the Modification and Distortion of Judgment”. In:
  27. (1998). Estimating the Effects of Unions on Wage Inequality in a Panel Data Model with Comparative Advantage and Non-Random Selection”. doi
  28. (2007). Evolutionary Efficiency and Happiness”. doi
  29. (2000). Experienced Utility and Objective Happiness”. doi
  30. (1986). Fairness and the assumptions of economics”. doi
  31. (1998). Falling Union Membership and Rising Wage Inequality: What‟s the Connection?” doi
  32. (2009). Gift Exchange and Workers‟ Fairness Concern - When Equality is Unfair”. doi
  33. (2004). Happiness Quantified. doi
  34. (1999). Hedonic Adaptation”.
  35. (2004). How Important is Methodology for the Estimates of the doi
  36. (1993). How Much Has De-Unionization Contributed to the Rise in Male Earnings Inequality?” In: Danziger doi
  37. (2009). ICTWSS Database: Database on Institutional Characteristics of Trade Unions, Wage Setting, State Intervention and Social Pacts in 34 countries between 1960 and 2007”. Institute for Advanced Labour Studies, AIAS,
  38. (1987). Incentives and Worker Behaviour”, doi
  39. (1949). Income, Savings and the Theory of Consumer Behavior, doi
  40. (1976). Individual Mobility and Union Voice in the Labor Market”. The American Economic Review Papers and Proceedings.
  41. (2006). Industrial Relations Report. URL: social/social_dialogue/docs/ir_report2006_en.pdf
  42. (1999). Inequality in the Labor Market”. In: Ashenfelter, Orley, and David Card (Eds.), doi
  43. (1965). Inequity in Social Exchange”. In: doi
  44. (2004). Information-Based Relative Consumption Effects”. doi
  45. (1997). Institutional Changes and Rising Wage Inequality: Is there a Linkage?” doi
  46. (1996). International Differences in Male Wage Inequality: Institutions versus Market Forces”. doi
  47. (2003). Intrinsic and Extrinsic Motivation”.
  48. (1997). Intrinsic Motivation and Extrinsic Incentives”. The American Economic Review Papers and Proceedings,
  49. (1990). Is Union Job Dissatisfaction Real?” doi
  50. (1998). Job Satisfaction, Trade Unions, and Exit-Voice Revisited”. doi
  51. (1982). Labor Contracts as Partial Gift Exchange”. doi
  52. (1991). Labor Economics and the Psychology of Organizations”. doi
  53. (1996). Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach”. doi
  54. (1983). Limited-Dependent and Qualitative Variables in Econometrics. doi
  55. (1991). Loss Aversion in Riskless Choice: A Reference-Dependent Model”. doi
  56. (1993). Market Orientation: Antecedents and Consequences”. doi
  57. (1994). New Challenges to the Rationality Assumption”. doi
  58. (1999). Objective Happiness”. In:
  59. (1983). On Least Squares Estimation when the Dependent Variable is Grouped‟. doi
  60. (2001). On the Validity of Utility Statements: Standard Theory versus Duesenberry’s”, doi
  61. (1955). Opinions and Social Pressure”. doi
  62. (2005). Optimal Incentive Contracts Under Inequity Aversion”. doi
  63. (1971). Pay and Organizational Effectiveness: A Psychological View. doi
  64. (1989). Pay Equality and Industrial Politics”. doi
  65. (2009). Pay Growth, Fairness and Job Satisfaction: Implications for Nominal and Real Wage Rigidity”.
  66. (2006). Pay, Reference Points, and Police Performance”. doi
  67. (1990). Peer Group Externalities and Learning Incentives: A Theory of Nerd Behavior”.
  68. (1992). Peer Pressure and Partnerships”. doi
  69. (1997). Peer Pressure in an Agency Relationship”. doi
  70. (2009). Peers at Work”. doi
  71. (1991). Procrastination and Obedience”.
  72. (1979). Prospect Theory: An Analysis of Decision under doi
  73. (2002). Psychological Foundations of Incentives”, doi
  74. (1952). Quota Restriction and Goldbrick-ing in a Machine Shop”. doi
  75. (1982). Rational Cooperation in the Finitely Repeated Prisoners' doi
  76. (1980). Rational Expectations with Misperceptions as a Theory of the Business Cycle”. doi
  77. (2005). Report on Individual Stated Job Preferences: a Conjoint Analysis Approach”, Report for the Workpackage NOVEL.
  78. (2009). Rewarding Carrots, Crippling Sticks: Uncovering the Preferred Incentives of European Employees”. doi
  79. (1981). Robust rank procedures for the Behrens-Fisher problem”. doi
  80. (1979). Sample Selection Bias as a Specification Error”. doi
  81. (2002). Self-Confidence and Personal Motivation”. doi
  82. (1993). Shirking or Work Morale? The Impact of Regulating”. doi
  83. (1986). Technology Adoption in the Presence of Network Externalities”. doi
  84. (1997). The Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-Out‟.
  85. (1997). The Decline of Labour Market Institutions and the Rise in Wage Inequality in Britain”. doi
  86. (1985). The Demand for Unobservable and Other Nonpositional Goods”.
  87. (1985). The Economic Theory of Trade Unions: An Introductory Survey “. doi
  88. (1996). The Effect of Unions on the Structure of Wages: doi
  89. (2001). The Effect of Unions on Wage Inequality in the U.S. doi
  90. (2004). The EPICURUS Database”, Final Report for the Workpackage QUESTION.
  91. (1980). The Exit-Voice Tradeoff in the Labor Market: Unionism, Job Tenure, Quits, and Separations”. doi
  92. (1990). The Fair Wage-Effort Hypothesis and Unemployment”. doi
  93. (1982). The Fairness of Earnings Differentials: An Experimental Study of the Perceptions of Blue-Collar Workers”. doi
  94. (1985). The Free Rider Problem and a Social Custom Model of Trade Union Membership”. doi
  95. (1936). The General Theory of Employment, Interest and Money. doi
  96. (2006). The Hidden Costs of Control”. doi
  97. (2006). The Impact of Group Membership on Cooperation and Norm Enforcement: Evidence Using Random Assignment to Real Social Groups”. doi
  98. (1999). The Provision of Incentives in Firms”, doi
  99. (1993). The Role of Fairness in Wage Determination”. doi
  100. (1977). The Structure of Random Utility Models”. doi
  101. (1977). The Structure of Random Utility Models”. Theory and Decision. doi
  102. (2007). Tom Sawyer and the Construction of Value”. doi
  103. (1963). Toward an Understanding of Inequity”. doi
  104. (1948). Trade Union Wage Policy. doi
  105. (2009). Union Mediation and Adaptation to Reciprocal Loyalty Arrangements”. doi
  106. (1980). Unionism and the Dispersion of Wages”. doi
  107. (1978). Unionism and Wage Rates: A Simultaneous Equations Model with Qualitative and Limited Dependent Variables." doi
  108. (2004). Unions and Wage Inequality”. doi
  109. (1979). Wage Determination in an Economy with Many Trade Unions”. doi
  110. (1996). Wage Interactions: Comparisons or Fall-Back Options?” doi
  111. (1976). Wage Interdependence in Unionized Labor Markets”. With commentary from: doi
  112. (1998). Why not cut pay?” doi
  113. (1999). Why Wages Don't Fall During a Recession. doi
  114. (1980). Why Workers Want Unions: The Role of Relative Wages and Job Characteristics”. doi
  115. (1997). Worker Performance and Group Incentives: A Case Study”, doi

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.