Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/20879 
Year of Publication: 
1999
Series/Report no.: 
IZA Discussion Papers No. 42
Publisher: 
Institute for the Study of Labor (IZA), Bonn
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.
Subjects: 
Job satisfaction
wage inequalitiy returns to human capital
earnings shocks
JEL: 
J28
Document Type: 
Working Paper

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