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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. Drakopoulos, Stavros A., 2023. "The Economics of Wellbeing and Psychology: An Historical and Methodological Viewpoint," MPRA Paper 117891, University Library of Munich, Germany.
    4. 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.
    5. 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.
    6. 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.
    7. Anastasia Dubnovitskaya, 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.
    8. Anastasia Dubnovitskaya & Kirill Furmanov, 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.
    9. 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, IZA Network @ LISER.
    10. Yadong Wen & Yan Chen & Jingshuang Cui, 2024. "RETRACTED ARTICLE: Global Knowledge Flows: Impact of Pay Reference Points in a Knowledge-Driven Economy," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(4), pages 17901-17943, December.
    11. Tilman Woerz & Matthias Collischon & Tobias Wolbring, 2025. "The Social Dynamics of Economic Comparisons: A Longitudinal Study on the Effects of Relative Wages on Subjective Well-Being Using Linked Survey and Register Data," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 179(2), pages 979-1001, September.
    12. Mariana Santis & Marcelo Florensa & María Cecilia Gáname & Pedro Esteban Moncarz, 2021. "Job Satisfaction of Recent University Graduates in Economics Sciences: The Role of the Match Between Formal Education and Job Requirements," Journal of Happiness Studies, Springer, vol. 22(7), pages 3157-3197, October.

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