Reference wages and turnover intentions: evidence from linked employer-employee data

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This research note analyzes the nexus between workers’ turnover intentions and workers’ own wages, internal and external reference wages. Worker and establishment surveys are linked with administrative social security data for all workers in surveyed establishments. Approximately half a million worker-year observations are used to predict conditional internal and external reference wages. Results show that higher external and internal reference wages are correlated with higher turnover intentions. Thus, external reference wages seem to serve as outside options and higher reference wages of co-workers seem rather to reduce own social status than to signal better future prospects at the current employer.

Original languageEnglish
JournalApplied Economics Letters
Issue number14
Pages (from-to)1955-1959
Number of pages5
Publication statusPublished - 2023

Bibliographical note

Funding Information:
This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors. We thank participants of the 2020 Annual Meeting of the American Economic Association in San Diego, the Workshop in “Assessing the Impact of Human Resource Management Practices” 2017 in Nurnberg, the Workshop in Management Research 2017 in Wuppertal, department seminar at LUISS university Rome, as well as Andrew Clark, Stefan Schneck, Susanne Steffes, Gesine Stephan, and Knut Gerlach for their comments.

Publisher Copyright:
© 2022 Informa UK Limited, trading as Taylor & Francis Group.

    Research areas

  • Income comparison, linked employer-employee data, signal, status, turnover
  • Economics