Some pay raises considered a failure

June 11, 2012 at 9:54 PM
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WARWICK, England, June 11 (UPI) -- Getting more money -- such as a pay raise -- may not make one happier, especially if the recipient is neurotic, British and U.S. researchers say.

Dr. Eugenio Proto of the University of Warwick and Aldo Rustichini of the University of Minnesota said the results of their study suggested some see money more as a device to measure successes or failures rather than as a means to achieve more comfort.

Proto and Rustichini found people who have higher salaries and high levels of neuroticism were more likely to see a pay raise as a failure.

Neuroticism is a personality trait in psychology and refers to a tendency to experience negative emotional states -- people with high levels of neuroticism have higher sensitivity to anger, hostility, or depression, Pronto said.

"Someone who has high levels of neuroticism will see an income increase as a measure of success. When they are on a lower income, a pay increase does satisfy them because they see that as an achievement," the researchers said in a statement. "However, if they are already on a higher income they may not think the pay increase is as much as they were expecting. So they see this as a partial failure and it lowers their life satisfaction."

The researchers used data from the British Household Panel Survey and the German Socioeconomic Panel.

Proto is scheduled to be presented at next month's Economic and Social Research Council Research Methods Festival.

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