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Job satisfaction and quits

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  • Levy-Garboua, Louis
  • Montmarquette, Claude
  • Simonnet, Veronique

Abstract

We test the wealth maximization theory of quitting behavior on the German Socioeconomic Panel (1985-2003). With the interpretation of job satisfaction as an expression of the experienced preference for the present job against available alternatives, the propensity to stay in the present job is simply related to the residual of a job satisfaction equation. We show that this residual is a better predictor of quits than the overall level of satisfaction. Furthermore, we validate a dynamic extension of the economic theory of quits for which uncertainty in the expectation of future events plays a decisive role.

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Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 14 (2007)
Issue (Month): 2 (April)
Pages: 251-268

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Handle: RePEc:eee:labeco:v:14:y:2007:i:2:p:251-268

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References

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  1. Clark, Andrew E. & Oswald, Andrew J., 1996. "Satisfaction and comparison income," Journal of Public Economics, Elsevier, vol. 61(3), pages 359-381, September.
  2. Topel, Robert H & Ward, Michael P, 1992. "Job Mobility and the Careers of Young Men," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 439-79, May.
  3. George A. Akerlof & Andrew K. Rose & Janet L. Yellen, 1988. "Job Switching and Job Satisfaction in the U.S. Labor Market," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(2), pages 495-594.
  4. Daniel S. Hamermesh, 1999. "The Changing Distribution of Job Satisfaction," NBER Working Papers 7332, National Bureau of Economic Research, Inc.
  5. Viscusi, W Kip, 1979. "Job Hazards and Worker Quit Rates: An Analysis of Adaptive Worker Behavior," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 20(1), pages 29-58, February.
  6. Ann P. Bartel, 1982. "Wages, nonwage job characteristics, and labor mobility," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 35(4), pages 578-589, July.
  7. Levy-Garboua, Louis & Montmarquette, Claude, 2004. "Reported job satisfaction: what does it mean?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 33(2), pages 135-151, April.
  8. Parsons, Donald O, 1991. "The Job Search Behavior of Employed Youth," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 597-604, November.
  9. Galizzi, Monica & Lang, Kevin, 1998. "Relative Wages, Wage Growth, and Quit Behavior," Journal of Labor Economics, University of Chicago Press, vol. 16(2), pages 367-91, April.
  10. Mortensen, Dale T, 1988. "Wages, Separations, and Job Tenure: On-the-Job Specific Training or Matching?," Journal of Labor Economics, University of Chicago Press, vol. 6(4), pages 445-71, October.
  11. van Ophem, Hans, 1991. "Wages, Nonwage Job Characteristics and the Search Behavior of Employees," The Review of Economics and Statistics, MIT Press, vol. 73(1), pages 145-51, February.
  12. Gottschalk, Peter & Maloney, Tim, 1985. "Involuntary Terminations, Unemployment, and Job Matching: A Test of Job Search Theory," Journal of Labor Economics, University of Chicago Press, vol. 3(2), pages 109-23, April.
  13. Freeman, Richard B, 1978. "Job Satisfaction as an Economic Variable," American Economic Review, American Economic Association, vol. 68(2), pages 135-41, May.
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