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Estimates of the Effect of Wages on Job Satisfaction

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Author Info
Arnaud Chevalier
Reamonn Lydon

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Abstract

Empirical studies on job satisfaction have relied on two hypotheses: firstly, that wages are exogenous in a job satisfaction regression and secondly, that appropriate measures of relative wage can be inferred. In this paper we test both assumptions using two cohorts of UK university graduates. We find that controlling for endogeneity, the direct wage effect on job satisfaction doubles. Several variables relating to job match quality also impact on job satisfaction. Graduates who get good degrees report higher levels of job satisfaction, as do graduates who spend a significant amount of time in job search. Finally we show that future wage expectations and career aspirations have a significant effect on job satisfaction and provide better fit than some ad-hoc measures of relative wage.

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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number 0531.

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Date of creation: May 2002
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Handle: RePEc:cep:cepdps:0531

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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. [Downloadable!] (restricted)
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  2. Shields, Michael A. & Ward, Melanie E., 2000. "Improving Nurse Retention in the British National Health Service: The Impact of Job Satisfaction on Intentions to Quit," IZA Discussion Papers 118, Institute for the Study of Labor (IZA). [Downloadable!]
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  3. Levy-Garboua, Louis & Montmarquette, Claude, 2004. "Reported job satisfaction: what does it mean?," The Journal of Socio-Economics, Elsevier, vol. 33(2), pages 135-151, April. [Downloadable!] (restricted)
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  4. Biddle, Jeff E & Hamermesh, Daniel S, 1998. "Beauty, Productivity, and Discrimination: Lawyers' Looks and Lucre," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 172-201, January. [Downloadable!] (restricted)
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  5. Freeman, Richard B, 1978. "Job Satisfaction as an Economic Variable," American Economic Review, American Economic Association, vol. 68(2), pages 135-41, May. [Downloadable!] (restricted)
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  6. Hamermesh, Daniel S., 1999. "The Changing Distribution of Job Satisfaction," IZA Discussion Papers 42, Institute for the Study of Labor (IZA). [Downloadable!]
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  7. Becker, Gary S, 1973. "A Theory of Marriage: Part I," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 813-46, July-Aug.. [Downloadable!] (restricted)
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  8. Idson, Todd L, 1990. "Establishment Size, Job Satisfaction and the Structure of Work," Applied Economics, Taylor and Francis Journals, vol. 22(8), pages 1007-18, August.
  9. repec:att:wimass:199110 is not listed on IDEAS
  10. Tversky, Amos & Kahneman, Daniel, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, MIT Press, vol. 106(4), pages 1039-61, November. [Downloadable!] (restricted)
  11. Smith, Richard J & Blundell, Richard W, 1986. "An Exogeneity Test for a Simultaneous Equation Tobit Model with an Application to Labor Supply," Econometrica, Econometric Society, vol. 54(3), pages 679-85, May. [Downloadable!] (restricted)
  12. Clark, Andrew E., 1997. "Job satisfaction and gender: Why are women so happy at work?," Labour Economics, Elsevier, vol. 4(4), pages 341-372, December. [Downloadable!] (restricted)
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  13. Battu, H. & Belfield, C. R. & Sloane, P. J., . "Overeducation Among Graduates: A Cohort View," Working Papers 98-03, Department of Economics, University of Aberdeen. [Downloadable!]
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  1. Steve Bradley & Jim Taylor & Anh Ngoc Nguyen, 2003. "Relative pay and job satisfaction: some new evidence," Working Papers 000187, Lancaster University Management School, Economics Department. [Downloadable!]
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  2. M Manacorda & Enrico Moretti, 2002. "Intergenerational Transfers and Household Structure. Why Do Most Italian Youths Live With Their Parents?," CEP Discussion Papers 0536, Centre for Economic Performance, LSE. [Downloadable!]
  3. W.D. McCausland & K. Pouliakas & I. Theodossiou, 2005. "Some are Punished and Some are Rewarded: A Study of the Impact of Performance Pay on Job Satisfaction," Labor and Demography 0505019, EconWPA. [Downloadable!]
  4. Sánchez Cañizares, Sandra Mª & Artacho Ruiz, Carlos & Fuentes García, Fernando J. & López-Guzmán Guzmán,Tomás J., 2007. "Análisis de los determinantes estructurales de la satisfacción laboral. Aplicación en el sector educativo/Analizing the Structural Determinants of Job Satisfaction. An Application in the Educationa," Estudios de Economía Aplicada, Revista Estudios de Economía Aplicada, vol. 25, pages 819 - 34 , Diciembre. [Downloadable!] (restricted)
  5. Richard Dickens & Alan Manning, 2002. "Has The National Minimum Wage Reduced UK Wage Inequality?," CEP Discussion Papers 0533, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
  6. Nattavudh Powdthavee, 2003. "Is the Structure of Happiness Equations the Same in Poor and Rich Countries? The Case of South Africa," Development and Comp Systems 0309003, EconWPA, revised 06 Nov 2003. [Downloadable!]
    Other versions:
  7. Pouliakas, Konstantinos & Theodossiou, Ioannis, 2004. "Confronting Objections to Performance Pay: A Study of the Impact of Individual and Gain-sharing Incentives on the Job Satisfaction of British Employees," MPRA Paper 1629, University Library of Munich, Germany, revised 31 Jan 2007. [Downloadable!]
  8. Federica Origo & Laura Pagani, 2006. "Is Work Flexibility a Stairway to Heaven? The Story Told by Job Satisfaction in Europ," Working Papers 97, University of Milano-Bicocca, Department of Economics, revised Jun 2006. [Downloadable!]
  9. Maximo Rossi & Marisa Bucheli, 2004. "The level of satisfaction with life: evidence gathered among women from Greater Montevideo," Microeconomics 0407012, EconWPA. [Downloadable!]
  10. Edvard Johansson, 2004. "Job Satisfaction in Finland - Some results from the European Community Household Panel 1996-2001," Discussion Papers 958, The Research Institute of the Finnish Economy. [Downloadable!]
  11. Konstantinos Pouliakas & Ioannis Theodossiou, 2005. "Socio-Economic Differences in the Perceived Quality of High and Low-Paid Jobs in Europe," Labor and Demography 0506002, EconWPA. [Downloadable!]
  12. Steve Bradley & Jim Taylor & Anh Ngoc Nguyen, 2003. "Job autonomy and job satisfaction: new evidence," Working Papers 000192, Lancaster University Management School, Economics Department. [Downloadable!]
  13. Josse Delfgaauw, 2005. "The Effect of Job Satisfaction on Job Search: Not just whether, but also where," Tinbergen Institute Discussion Papers 05-097/1, Tinbergen Institute. [Downloadable!]
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  14. Philip Stevens, 2005. "The job satisfaction of English academics and their intentions to quit academe," Labor and Demography 0512005, EconWPA. [Downloadable!]
    Other versions:
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