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Do Comparison Wages Play a Major Role in Determining Overall Job Satisfaction? Evidence from Australia

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  • Temesgen Kifle

Abstract

A vast research literature indicates that comparison wages play a key role in determining job satisfaction. To examine this in the case of Australia, comparison wages are first constructed using two different measures, namely (1) cell average wages by age, gender and education level; and (2) ranked position of an individual’s wages in each cell. Then, using the first six waves of the HILDA Survey dataset, a random effects ordered probit model is utilized to predict overall job satisfaction. The findings of the study show that both own wages and comparison wages have an impact on overall job satisfaction. Comparison wages computed using the ranked position of an individual’s wages within a cell have an equal effect as that of own wages. The study further confirms that the ranked position of an individual’s wages in each cell matters more than cell average wages. Copyright Springer Science+Business Media Dordrecht 2014

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  • Temesgen Kifle, 2014. "Do Comparison Wages Play a Major Role in Determining Overall Job Satisfaction? Evidence from Australia," Journal of Happiness Studies, Springer, vol. 15(3), pages 613-638, June.
    • Handle: RePEc:spr:jhappi:v:15:y:2014:i:3:p:613-638
    DOI: 10.1007/s10902-013-9439-6
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    3. Stavros A. Drakopoulos, 2020. "Pay Level Comparisons in Job Satisfaction Research and Mainstream Economic Methodology," Journal of Happiness Studies, Springer, vol. 21(3), pages 825-842, March.
    4. Dolan, Paul & Foy, Chloe & Kavetsos, Georgios & Kudrna, Laura, 2021. "Faster, higher, stronger… and happier? Relative achievement and marginal rank effects," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 95(C).
    5. Dubnovitskaya, Anastasia, 2021. "Who is satisfied with their pay? Evidence from the Russian Longitudinal Monitoring Survey," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 64, pages 49-69.
    6. Gevrek, Deniz & Spencer, Marilyn & Hudgins, David & Chambers, Valrie, 2017. "I Can't Get No Satisfaction: The Power of Perceived Differences in Employee Retention and Turnover," IZA Discussion Papers 10577, Institute of Labor Economics (IZA).
    7. Laetitia Hauret & Ludivine Martin & Nessrine Omrani & Donald R Williams, 2022. "How do HRM practices improve employee satisfaction?," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 43(2), pages 972-996, May.
    8. Drakopoulos, Stavros A., 2023. "The Economics of Wellbeing and Psychology: An Historical and Methodological Viewpoint," MPRA Paper 117891, University Library of Munich, Germany.
    9. Maryam Dilmaghani, 2022. "Revisiting the gender job satisfaction paradox: The roots seem to run deep," British Journal of Industrial Relations, London School of Economics, vol. 60(2), pages 278-323, June.
    10. Dubnovitskaya, Anastasia & Furmanov, Kirill, 2022. "Relative wage as a determinant of pay satisfaction in Russia," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 66, pages 99-117.

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