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Job Satisfaction, Wage changes and Quits: Evidence from Germany


  • Andrew Clark
  • Yannis Georgellis
  • Peter Sanfey


This paper uses data from ten waves of the German Socio-Economic Panel to examine the effect of wages and job satisfaction on workers' future quit behaviour. Our results show that workers who report dissatisfaction with their jobs are statistically more likely to quit than those with higher levels of satisfaction. The cross-sectional distribution of job satisfaction responses thus contains information which enables us to predict workers' future behaviour. This result is remarkably robust to specification changes, and to estimation methods that account explicitly for unobserved heterogeneity. We find some evidence for males that wage changes are a better predictor of quits than wage levels, consistent with comparison effects stressed in the psychology literature.
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Suggested Citation

  • Andrew Clark & Yannis Georgellis & Peter Sanfey, "undated". "Job Satisfaction, Wage changes and Quits: Evidence from Germany," Economics and Finance Discussion Papers 98-06, Economics and Finance Section, School of Social Sciences, Brunel University.
  • Handle: RePEc:bru:bruedp:98-06

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    References listed on IDEAS

    1. Pestieau, Pierre & Possen, Uri M., 1991. "Tax evasion and occupational choice," Journal of Public Economics, Elsevier, vol. 45(1), pages 107-125, June.
    2. Boadway, Robin & Marchand, Maurice & Pestieau, Pierre, 1991. "Optimal linear income taxation in models with occupational choice," Journal of Public Economics, Elsevier, vol. 46(2), pages 133-162, November.
    3. Kanbur, Ravi & Tuomala, Matti, 1994. " Inherent Inequality and the Optimal Graduation of Marginal Tax Rates," Scandinavian Journal of Economics, Wiley Blackwell, vol. 96(2), pages 275-282.
    4. Kihlstrom, Richard E & Laffont, Jean-Jacques, 1979. "A General Equilibrium Entrepreneurial Theory of Firm Formation Based on Risk Aversion," Journal of Political Economy, University of Chicago Press, vol. 87(4), pages 719-748, August.
    5. Eytan Sheshinski, 1972. "The Optimal Linear Income-tax," Review of Economic Studies, Oxford University Press, vol. 39(3), pages 297-302.
    6. Pestieau, Pierre & Possen, Uri, 1992. "How Do Taxes Affect Occupational Choice," Public Finance = Finances publiques, , vol. 47(1), pages 108-119.
    7. Stern, N. H., 1976. "On the specification of models of optimum income taxation," Journal of Public Economics, Elsevier, vol. 6(1-2), pages 123-162.
    8. Mazur, Mark J, 1989. "Optimal Linear Taxation with Stochastic Incomes," Public Finance = Finances publiques, , vol. 44(1), pages 31-50.
    9. Christiansen, Vidar, 1988. " Choice of Occupation, Tax Incidence and Piecemeal Tax Revision," Scandinavian Journal of Economics, Wiley Blackwell, vol. 90(2), pages 141-159.
    10. Jung, Young H. & Snow, Arthur & Trandel, Gregory A., 1994. "Tax evasion and the size of the underground economy," Journal of Public Economics, Elsevier, vol. 54(3), pages 391-402, July.
    11. Watson, Harry, 1985. "Tax evasion and labor markets," Journal of Public Economics, Elsevier, vol. 27(2), pages 231-246, July.
    12. Showalter, Mark H. & Thurston, Norman K., 1997. "Taxes and labor supply of high-income physicians," Journal of Public Economics, Elsevier, vol. 66(1), pages 73-97, October.
    13. Feldstein, Martin, 1973. "On the optimal progressivity of the income tax," Journal of Public Economics, Elsevier, vol. 2(4), pages 357-376.
    14. Paul Baker, 1993. "Taxpayer compliance of the self-employed: estimates from household spending data," IFS Working Papers W93/14, Institute for Fiscal Studies.
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    More about this item

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs


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