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The Impact of Wage Increases on Job Satisfaction - Empirical Evidence and Theoretical Implications

Author

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  • Grund, Christian

    (RWTH Aachen University)

  • Sliwka, Dirk

    (University of Cologne)

Abstract

The impact of wage increases on job satisfaction is explored. First, it is empirically established that current job satisfaction rises with absolute wage level as well as with wage increases. Second, a basic job satisfaction function is constructed based on the empirical results, and theoretical implications are analysed. It is shown that the myopic maximisation of such a function directly implies increasing and concave shaped age-earnings profiles.

Suggested Citation

  • Grund, Christian & Sliwka, Dirk, 2001. "The Impact of Wage Increases on Job Satisfaction - Empirical Evidence and Theoretical Implications," IZA Discussion Papers 387, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp387
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    References listed on IDEAS

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    Cited by:

    1. McCausland, David & Pouliakas, Konstantinos & Theodossiou, Ioannis, 2005. "Some are Punished and Some are Rewarded: A Study of the Impact of Performance Pay on Job Satisfaction," MPRA Paper 14243, University Library of Munich, Germany.
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    3. Daniel Dietz & Thomas Zwick, 2016. "The retention effect of training – portability, visibility, and credibility," Economics of Education Working Paper Series 0113, University of Zurich, Department of Business Administration (IBW).
    4. Inmaculada García & José Molina & María Navarro, 2007. "How Satisfied are Spouses with their Leisure Time? Evidence from Europe," Journal of Family and Economic Issues, Springer, vol. 28(4), pages 546-565, December.
    5. 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 Educational F," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 25, pages 887-900, Diciembre.
    6. Fengyu Wu, 2021. "Modern Economic Growth, Culture, and Subjective Well-Being: Evidence from Arctic Alaska," Journal of Happiness Studies, Springer, vol. 22(6), pages 2621-2651, August.
    7. Johansson, Edvard, 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.
    8. Konstantinos Pouliakas & Ioannis Theodossiou, 2005. "Socio-Economic Differences in the Perceived Quality of High and Low-Paid Jobs in Europe," Labor and Demography 0506002, University Library of Munich, Germany.
    9. Filiz Gülal & Adam Ayaita, 2020. "The Impact of Minimum Wages on Well-Being: Evidence from a Quasi-experiment in Germany," Journal of Happiness Studies, Springer, vol. 21(7), pages 2669-2692, October.
    10. Romina Gambacorta & Maria Iannario, 2012. "Statistical models for measuring job satisfaction," Temi di discussione (Economic working papers) 852, Bank of Italy, Economic Research and International Relations Area.
    11. Namkee Ahn & Juan Ramón García, "undated". "Job Satisfaction in Europe," Working Papers 2004-16, FEDEA.
    12. Nguyen, Anh & Taylor, Jim & Bradley, Steve, 2003. "Relative pay and job satisfaction: some new evidence," MPRA Paper 1382, University Library of Munich, Germany.
    13. Redmond, Paul & Ciprikis, Klavs & Staffa, Elisa, 2023. "Job quality of minimum wage workers in Ireland," Research Series, Economic and Social Research Institute (ESRI), number RS165, June.
    14. Vicente Royuela & Jordi Suriñach, 2013. "Quality of Work and Aggregate Productivity," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 113(1), pages 37-66, August.

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    More about this item

    Keywords

    age-earnings profiles; Job satisfaction; wage increases; habit formation;
    All these keywords.

    JEL classification:

    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation

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