Daniel Obst
Many employees want to reduce their working hours. Yet they often do not act on that preference, even though they would accept lower pay for more leisure. This dissertation examines this overwork paradox by shifting attention to the social context in which working-time decisions are made. I argue that labor supply can be shaped by a conflict between competition for status and fairness concerns. On the one hand, upward comparisons create pressure to keep up. Many would prefer more leisure collectively, yet choose longer hours individually to avoid falling behind and to protect their relative rank. On the other hand, upward comparisons can be perceived as unfair, which demotivates employees and reduces their willingness to work. The dissertation disentangles these opposing forces and examines conditions under which income inequality may increase or decrease labor supply. Across three studies, I provide experimental and mechanism-oriented evidence that both forces can operate and that the net effect of inequality on labor supply depends on their relative strength. The framework article develops a theory-guided map of mechanisms that predict different labor-supply reactions to income inequality and social comparison: it contrasts the neoclassical labor supply model with mechanisms based on competition for status and positional goods, the fair-wage hypothesis, expectations about future income (tournament incentives and the tunnel effect), income targeting, peer effects, and meritocratic internalization. Building on this map, the framework article assesses the empirical literature and identifies a tension: macroeconomic studies document that high inequality coincides with longer working hours, consistent with status competition, but primarily rely on correlations. In contrast, causal experimental studies often reveal labor-decreasing fairness reactions to inequality. The three studies address this gap by examining status-driven effects on labor supply with complementary identification strategies. Study 1 provides exploratory evidence from a real-effort laboratory experiment (N = 120) in which participants can work for up to 135 minutes under unequal pay. Social comparison is introduced via \textit{rank feedback}: a real-time bar chart that compares a participant's cumulative earnings with the projected final earnings of peers. Without rank feedback, lower-paid participants work 21\% less than higher-paid participants, consistent with a fairness-based deterrence response. With rank feedback, lower-paid participants increase labor supply by 22\% on average, narrowing the working-time gap, although these behavioral estimates are statistically fragile and depend on specification. This catch-up response comes with emotional costs as well. While rank feedback boosts satisfaction for high earners, it simultaneously \enquote{widens the joy gap} across pay groups. Low-paid participants in the rank-feedback treatment report lower levels of pleasure and interest, coupled with higher boredom compared to their higher-paid peers. Study 2 uses a within-subject survey experiment resembling a prisoner's dilemma in a sample of 154 university students. Participants choose between \textit{higher income} and a \textit{working-time reduction} under an \textit{individual decision} scenario in which choices affect relative income, and a \textit{collective decision} scenario in which relative income remains constant. The share choosing higher income over a working-time reduction rises from 36\% to 47\% when relative income is at stake. This increase is descriptively larger among individuals classified as status-sensitive according to a benchmark measure (from 29\% to 50\%). The results also suggest that positional pressure is not confined to conspicuous luxuries: when participants are primed with different consumption motives, positional effects also appear in domains that resemble long-term investments and insurance against disadvantage, including education, health, and private pension plans. Study 3 investigates the dual effect of income inequality on labor-supply intentions in an online survey experiment with a representative sample of 993 working adults in Germany. Participants make choices in a hypothetical world with either high or low income inequality. The high-inequality condition has no detectable reduced-form effect on intended weekly hours or work-career trade-offs, but it moves the proposed mediators in opposite directions: it lowers perceived fairness while increasing perceived competitiveness, economic worries, and status anxiety. Using structural equation modeling, I examine these psychological pathways. Reduced perceived fairness is associated with a lower willingness to prioritize work-career activities, whereas positional channels point in the opposite direction in specific trade-offs: perceived competitiveness is associated with a stronger work-career orientation at the expense of time spent on hobbies, friends and family, and volunteering; economic worries are associated with a stronger work-career orientation at the expense of hobbies and friends. Status anxiety also rises under inequality, but it does not receive confirmatory support as a pathway to work-related choices. The dissertation shows that status competition can push labor supply upward even when individuals would prefer more leisure collectively, but that this response is constrained by fairness concerns, depends on the empirical setting, and can carry emotional costs. The findings imply that the labor supply decision is not merely a matter of individual preferences or incentives, but also a coordination problem fueled by social comparison under inequality.