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The Changing Distribution of Job Satisfaction

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  • Hamermesh, Daniel S.

    () (Barnard College)

Abstract

The distribution of job satisfaction widened across cohorts of young men in the U.S. between 1978 and 1988, and between 1978 and 1996, in ways correlated with changing wage inequality. Satisfaction among workers in upper earnings quantiles rose relative to that of workers in lower quantiles. An identical phenomenon is observed among men in West Germany in response to a sharp increase in the relative earnings of high-wage men in the mid-1990s. Several hypotheses about the determinants of satisfaction are presented and examined using both cross-section data on these cohorts and panel data from the NLSY and the German SOEP. The evidence is most consistent with workers regret about the returns to their investment in skills affecting their satisfaction. Job satisfaction is especially responsive to surprises in the returns to observable skills, less so to surprises in the returns to unobservables; and the effects of earnings shocks on job satisfaction dissipate over time.

Suggested Citation

  • Hamermesh, Daniel S., 1999. "The Changing Distribution of Job Satisfaction," IZA Discussion Papers 42, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp42
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    References listed on IDEAS

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    1. Levy-Garboua, Louis & Montmarquette, Claude, 2004. "Reported job satisfaction: what does it mean?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 33(2), pages 135-151, April.
    2. Freeman, Richard B, 1978. "Job Satisfaction as an Economic Variable," American Economic Review, American Economic Association, vol. 68(2), pages 135-141, May.
    3. Farber, Henry S, 1990. "The Decline of Unionization in the United States: What Can Be Learned from Recent Experience," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 75-105, January.
    4. Bound, John & Brown, Charles & Mathiowetz, Nancy, 2001. "Measurement error in survey data," Handbook of Econometrics,in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 59, pages 3705-3843 Elsevier.
    5. Clark, Andrew E. & Oswald, Andrew J., 1996. "Satisfaction and comparison income," Journal of Public Economics, Elsevier, vol. 61(3), pages 359-381, September.
    6. Steiner, Viktor & Wagner, Kersten, 1997. "East West German wage convergence - How far have we got?," ZEW Discussion Papers 97-25, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    7. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
    8. Gerlach, Knut & Stephan, Gesine, 1996. "A paper on unhappiness and unemployment in Germany," Economics Letters, Elsevier, vol. 52(3), pages 325-330, September.
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    More about this item

    Keywords

    returns to human capital; wage inequality; Job satisfaction; earning shocks;

    JEL classification:

    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy

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