Credit: LISER

A LISER publication has indicated that the longer a “cross-border” worker spends on the Luxembourg labour market, the more likely they are compare their earnings to local workers, rather than workers in other countries.

LISER has published a paper examining the relationship between the time spent in the labour market and the choice of reference group for making relative income comparisons. The choice of reference group has been found in previous work to be an important determinant of various measures of well-being, including life, job and salary satisfaction.

Using a sample of respondents to a survey of working conditions in Luxembourg in 2013, the researchers estimated the effect of tenure in the Luxembourg labour market on the probability of choosing various reference groups for making income comparisons.

This income comparison between local and cross-border workers showed that the longer cross-border workers and residents have been working in Luxembourg, the less they refer to employees working in other countries or to their relatives or colleagues, and the more they refer to other employees in Luxembourg.

The results suggested that these two categories of workers acclimate, over time, to the Luxembourg labour market, abandoning the reference groups that were initially closest to them in favour of groups that are presently geographically closer. These results were found to be consistent with studies of immigrant workers who are hypothesised to adjust their reference group over time.