Job Satisfaction and Reference Wages: Evidence for a Developing Country

Abstract

Using Chilean data we present evidence about the relationship between job satisfaction, own wage, and reference group wage. We conducted a semi-nonparametric estimation of extended ordered probit models in order to identify the determinants of job satisfaction. Our main result indicates that a 10 % increase in the reference group wage would need to be compensated for by a 24.9 % increase in the own wage to give the same level of job satisfaction. This result shows the enormous importance of the reference group wage for job satisfaction.

How to pursue a sustainable happiness in prison communities: An Italian case study

“…In fact, the good social relationships between prison staff and inmates led them to actively participate to enhancing activities, such as professional training courses, creative activities, and internal and/or external job activities. The case organization nourished these good relationships enacting specific projects pointing to create a real sense of community, on the basis of shared beliefs, norms, rules, customs, and values, which can lead to go beyond the differences due, for example, to nativity, language, ethnicity, or profession (Montero & Vásquez, ).…”

Pay Level Comparisons in Job Satisfaction Research and Mainstream Economic Methodology

“…Their findings suggest that those with lower relative pay report lower job satisfaction and have higher quitting intensions, while those with higher relative pay report no higher satisfaction. Similarly, Montero and Vasquez (2015) found that job satisfaction depends not only on individuals' own wage but also on the relative wage. Furthermore, their results indicate that a 10% increase in the reference group wage would need to be compensated for by a 24.9 % increase in the own wage to give the same level of job satisfaction.…”

“…Borjas, 1979;Warr, 2007). There is no accepted list of variables affecting job satisfaction, but most authors include age, gender, education, job tenure, union membership, and firm location (see Hamermesh, 1977;Freeman, 1978;Borjas, 1979;Miller, 1990;Clark and Oswald, 1996;Clark, 1997;Montero and Vasquez, 2015). These variables may or may not affect earnings.…”

“…(e.g. Montero and Vasquez;Hauret and Williams, 2017). In general, the stated preferences approach as a valid scientific method is almost universally accepted in the relevant literature of subjective well-being.…”

Relative deprivation in the labor market

“…A study on intergenerational occupational mobility among male manual workers in the US showed that workers' satisfaction with their own occupational status largely depended on their status relative to the status of other males in their family, rather than on the workers' absolute status [10]. And yet another study on job satisfaction and wages among Chilean workers showed that job satisfaction is mainly driven by relative wages (relative to the reference group) as opposed to absolute wages [11].…”