Workplace inequality is associated with status-signaling expenditure

Abstract

Significance Scholars have identified that inequality is a notable detriment to well-being. Status-signaling luxury expenditure is taken as a symptom of the reduced well-being associated with income inequality. Despite evidence that status-signaling luxury expenditure is higher in unequal regions, it remains unclear who is affected by inequality. We use payroll and daily spending data from 683,677 individuals in 32,008 precisely-defined workplace peer groups to show that workers at unequal firms spend significantly more on high-status, luxury goods. This is also seen in those with a high absolute salary, but low salary rank within their workplace. Compared to aggregated, regional data, financial data allow us to identify groups of workplace peers and offer precise measurements of status-signaling expenditure for each individual.

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