Salary envy 'may make young employees happy'

   May 26, 12:19 pm

London, May 26 (ANI): Seeing others around them do well can actually makes young workers happy by providing them with aspirations, a new study has revealed.

Economists believe that workers under the age of 45 get high levels of satisfaction from seeing their peers earn more than them, because they think they have similar chances of success.

But the effect has a time limit - for those over the age of 45, comparisons with high-fliers can lead to misery, because there is less time to "catch up".

The study, entitled So Far So Good: Age, Sex, Happiness and Relative Income, was based on surveys carried out in Germany.

It divided participants into peer groups using characteristics such as age, education, and location, and hypothesised that people may be categorised as hares: people who are promoted early, or tortoises: those who develop more slowly.

The researchers found any negative impact of comparing salaries was limited to older workers.

"People are generally made less happy by comparisons," the Telegraph quoted Feliz FitzRoy, one of the co-authors of the report, as saying.

"In other words, the higher their peer group income, the worse they feel. With young people, it's the opposite," FitzRoy said.

FitzRoy, an expert in happiness and public economics at the University of St Andrews School of Economics and Finance, said those under the age of 45 were given a "positive boost" by knowing their peers earned more than them.

He added that the researchers planned to conduct a detailed study of British workers after finding initial differences between Germany and the UK, which suggested that older people in Britain were less affected by income comparisons.

But he said the findings had worrying implications for those currently at the beginning of their careers at a time of austerity and public spending cuts.

"What it does emphasise is how important aspirations are for young people.

"In a situation like the current austerity, these aspirations are being systematically destroyed because young graduates are lucky to get jobs and if they do, they are usually below their qualifications.

"We can conclude that this is particularly damaging to their self-esteem and of course, we find in virtually all studies that unemployment has very damaging effects," he added.

The study has been presented to the Royal Economic Society Conference in Cambridge. (ANI)

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