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Reported Job Satisfaction : What Does It Mean?

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  • LEVY-GARBOUA, Louis
  • MONTMARQUETTE, Claude

Abstract

By reporting his satisfaction with his job or any other experience, an individual does not communicate the number of utils that he feels. Instead, he expresses his posterior preference over available alternatives conditional on acquired knowledge of the past. This new interpretation of reported job satisfaction restores the power of microeconomic theory without denying the essential role of discrepancies between one’s situation and available opportunities. Posterior human wealth discrepancies are found to be the best predictor of reported job satisfaction. Static models of relative utility and other subjective well-being assumptions are all unambiguously rejected by the data, as well as an "economic" model in which job satisfaction is a measure of posterior human wealth. The "posterior choice" model readily explains why so many people usually report themselves as happy or satisfied, why both younger and older age groups are insensitive to current earning discrepancies, and why the past weighs more heavily than the present and the future.

Suggested Citation

  • LEVY-GARBOUA, Louis & MONTMARQUETTE, Claude, 1997. "Reported Job Satisfaction : What Does It Mean?," Cahiers de recherche 9705, Universite de Montreal, Departement de sciences economiques.
    • Handle: RePEc:mtl:montde:9705
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    File URL: http://hdl.handle.net/1866/442
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    More about this item

    Keywords

    job satisfaction; relative utility models; sterior choice model;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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