It pays not to know your colleagues' pay

People like you get on my nerves. That is, if you are paid more than I am. And if we work together. Apart from that you're fine. This is on the basis of this recent NBER paper which looks at how work satisfaction is diminished when people find out how much more their colleagues are paid. Knowing how much less some colleagues are paid on the other hand doesn't matter. So there is envy but no smugness. That's something I suppose. Sometimes a little knowledge is a dangerous thing.

Inequality at Work: The Effect of Peer Salaries on Job Satisfaction
David Card, Alexandre Mas, Enrico Moretti, Emmanuel Saez

Economists have long speculated that individuals care about both their absolute income and their income relative to others. 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 utility. A randomly chosen subset of employees of the University of California was informed about a new website listing the pay of all 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 indicate that utility depends directly on relative pay comparisons, and that this relationship is non-linear.

Job stress and satisfaction amongst Irish primary school principals

A recent article in the Irish Independent pointed to difficulties that primary schools in Ireland were having in attracting applicants for vacancies "Longer working hours, increased bureaucracy and poor rewards are thought to be the main causes of the poor take-up of jobs" it concluded. If so this is a serious problem. Interestingly, the Sunday Business Post recently carried an article suggesting that Irish public sector workers, including primary teachers, were comparatively well paid.
So what evidence do we have ? Growing Up in Ireland actually has some very good data on this and related issues. The principals in which the 9 year olds were pupils were asked about their stress levels. This is not a random sample of principals note: in schools where there are more than one study child then that principal will be counted more than once. But since these will tend to be in bigger schools this makes sense. So it should be reasonably representative of the population I think.
So what did they say? The graph below gives the responses and indicates fairly high stress levels. Almost 68% were "very" or "fairly" stressed.













The principals were also asked about job satisfaction. The results there suggest a different picture.Over 95% are "very" or "fairly" satisfied by their job. So based on this criterion, it would seem that our principals are not doing too badly and it is harder to understand why there might be recruitment difficulties. It may well be the case that it is particular types of school that are experiencing problems retaining or recruiting principals. It would be an interesting task to use this rich data source to explore what are the predictors of principals' (& teachers') job stress and satisfaction.