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Job Satisfaction And Relative Income In Economic Transition: Status Or Signal? The Case Of Urban China

  • Wenshu Gao
  • Russell Smyth

We use two datasets for urban China to examine whether an increase in reference group income lowers or increases job satisfaction. The former is consistent with a status effect ??? an increase in the income of others lowers my satisfaction because I feel jealous. The latter is consistent with a signal effect ??? an increase in the income of others might make me jealous, but it also provides an information signal about my future prospects. When we use a single item indicator of job satisfaction we find no support for a status or signal effect; however, when we use a psychometrically valid instrument to measure job satisfaction, we find some support for the existence of a status effect. We consider the components of job satisfaction through which the status effect operates. We find that the status effect operates through satisfaction with co-workers, operating procedures, pay and supervision.

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Paper provided by Monash University, Department of Economics in its series Development Research Unit Working Paper Series with number 12-09.

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Length: 39 pages
Date of creation: 01 Jul 2009
Date of revision:
Handle: RePEc:mos:druwps:2009-12
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