“Choose to be optimistic, it feels better?” Evidence of optimism on employment utility

Christopher Dawson, Timothy Hinks, Michail Veliziotis

OAI: oai:purehost.bath.ac.uk:publications/b16461fe-9a64-4ffd-93d1-55738e5a017b • DOI: https://doi.org/10.1111/boer.12107

Individual’s expected wages exceed predicted market wages. Rational expectations imply the divergence should be zero. If individuals over-estimate the return from their attributes and view the paid-employment return distribution too favourably, then conditional on market wages, subsequent employment utility is likely to be low through disappointment.