The causes and economic consequences of envy

16 pages, 1 figure.-- Presidential address delivered at the 34th Symposium of the Spanish Economic Association in Valencia, Spain, on December 10, 2009.In this lecture I first give an explanation for invidious preferences based on the (evolutionary) competition for resources. Then I show that these preferences have wide ranging and empirically relevant effects on labor markets, such as: workplace skill segregation, gradual promotions, wage increases that have no relation with productivity and downward wage flexibility. I suggest that labor and human resource economics can benefit from including envy into the standard set of factors considered in their theoretical and empirical models.I gratefully acknowledge the financial support from the Spanish Ministry of Science and Technology under grants CONSOLIDER INGENIO 2010 (CSD2006-0016), and ECO2009-10531.Publicad