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Job Satisfaction and Quits: Theory and Evidence from the German Socioeconomic Panel

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  • Louis Lévy-Garboua

    ()

  • Claude Montmarquette

    ()

  • Véronique Simonnet

Abstract

We test the simple wealth maximization theory of quitting behavior on the German Socioeconomic Panel (1985-1993). We develop a new methodology to extract a consistent estimate of how the expected present value of one's job (including the non-pecuniary component) compares with outside opportunities in the future from subjective questions about job and job-related satisfactions. It is based on the interpretation of job satisfaction as an expression of the experienced preference for the present job against available alternatives. With this interpretation, the propensity to stay in the present job is simply related to the residual of a job satisfaction equation. Our tests validate this theory of job satisfaction and the economiceconomic theory of quits. We also find that the residual of a job satisfaction equation is a better predictor of quits than the overall level of satisfaction. Dans cette étude, en utilisant les données du Panel Socio-économique Allemand (1985-1993), nous soumettons à réfutation un modèle simple de maximisation de la richesse pour expliquer le fait de quitter une entreprise. ¸ l'aide de questions subjectives sur la satisfaction dans l'emploi et dans d'autres domaines (loisir, santé...)autres types de satisfaction, nous développons une méthodologie permettant de comparer la valeur présente attendue de son emploi (incluant une composante non-pécuniaire) aux opportunités d'emplois extérieures. L'approche retenue est basée sur l'idée que une interprétation dela satisfaction qui exprime une préférence expérimentée de l'emploi actuel contre les alternatives d'emplois disponibles. La propension à garder l'emploi occupé dans ce contexte dépend estsimplementreliée aux du résidus de l'équation de satisfaction dans l'emploi. Nos tests confirment cette théorie de la satisfaction et le modèle classique de mobilité volontairela théorie économique de quitter volontairement son emploi. Finalement, nous observons que le résidu de l'équation de satisfaction dans l'emploi offre une meilleure prédiction du départ volontaire que le niveau général de la satisfaction.

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Bibliographic Info

Paper provided by CIRANO in its series CIRANO Working Papers with number 2001s-41.

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Date of creation: 01 Jun 2001
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Handle: RePEc:cir:cirwor:2001s-41

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Keywords: Voluntary quit; job satisfaction; wealth maximization model; Mobilité volontaire; satisfaction à l'emploi; modèle de maximisation de la richesse;

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References

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  1. 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.
  2. Clark, Andrew E. & Oswald, Andrew J., 1994. "Satisfaction and comparison income," CEPREMAP Working Papers (Couverture Orange) 9408, CEPREMAP.
  3. Freeman, Richard B, 1978. "Job Satisfaction as an Economic Variable," American Economic Review, American Economic Association, vol. 68(2), pages 135-41, May.
  4. 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.
  5. 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.
  6. Farber, Henry S & Gibbons, Robert, 1996. "Learning and Wage Dynamics," The Quarterly Journal of Economics, MIT Press, vol. 111(4), pages 1007-47, November.
  7. Ann P. Bartel & George J. Borjas, 1978. "Wage Growth and Job Turnover: An Empirical Analysis," NBER Working Papers 0285, National Bureau of Economic Research, Inc.
  8. Andrew Clark & Yannis Georgellis & Peter Sanfey, 1997. "Job Satisfaction, Wage Changes and Quits: Evidence from Germany," Studies in Economics 9711, Department of Economics, University of Kent.
  9. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-90, October.
  10. Jovanovic, Boyan, 1979. "Firm-specific Capital and Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1246-60, December.
  11. Robert H. Topel & Michael P. Ward, 1988. "Job Mobility and the Careers of Young Men," NBER Working Papers 2649, National Bureau of Economic Research, Inc.
  12. Lynch, Lisa M, 1991. "The Role of Off-the-Job vs. On-the-Job Training for the Mobility of Women Workers," American Economic Review, American Economic Association, vol. 81(2), pages 151-56, May.
  13. R. Mehra & E. Prescott, 2010. "The equity premium: a puzzle," Levine's Working Paper Archive 1401, David K. Levine.
  14. Murphy, Kevin M & Topel, Robert H, 2002. "Estimation and Inference in Two-Step Econometric Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 88-97, January.
  15. 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.
  16. 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.
  17. 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.
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Citations

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Cited by:
  1. Haile, Getinet Astatike, 2012. "Unhappy working with men? Workplace gender diversity and job-related well-being in Britain," Labour Economics, Elsevier, vol. 19(3), pages 329-350.
  2. Louis Lévy-Garboua & Claude Montmarquette, 1997. "Reported Job Satisfaction: What Does It Mean?," CIRANO Working Papers 97s-09, CIRANO.
  3. Nguyen, Anh & Taylor, Jim & Bradley, Steve, 2003. "Relative pay and job satisfaction: some new evidence," MPRA Paper 1382, University Library of Munich, Germany.
  4. Andrew E. Clark, 2010. "Work and Well-Being," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 8(4), pages 17-21, 01.
  5. J Taylor & S Bradley & A N Nguyen, 2003. "Job autonomy and job satisfaction: new evidence," Working Papers 541528, Lancaster University Management School, Economics Department.
  6. Petri Böckerman & Pekka Ilmakunnas, 2005. "Job disamenities, job satisfaction, and on-the-job search: is there a nexus?," Labor and Demography 0501002, EconWPA.

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