Is job satisfaction u shaped in earnings

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Is job satisfaction u shaped in earnings?

• Andrew Brown, Andy Charlwood, Chris Forde and
  David Spencer
• Presentation prepared for the Work, Employment
  and Society conference, University of Aberdeen,
  12th-14th September 2007

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Background

• Job satisfaction and well-being at work
  increasingly important areas of research
• Move to full employment hence turn to quality
  of employment
• Knowledge economy focus on high skill, high
  quality jobs
• Issue of work-life balance

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Background

• Our project has used large scale social surveys
  to address the question of job satisfaction (and
  job quality more broadly)
• We bring to bear a political economy approach
  to job satisfaction and to job quality (see
  below).

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Main Argument

• Much of the literature takes a utility approach
  to job satisfaction
• economics of happiness (e.g. Layard, Clark)
• Roses project (league tables of occupational
  job satisfaction)
• We will argue for an alternative, objective
  approach to job satisfaction data
• We uncover a u-shape relation between reported
  job satisfaction and earnings we argue that this
  result can only be properly explained through
  political economy

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Point of reference

• We will particularly consider league tables of
  job satisfaction in occupations constructed by
  Rose (2003, 2007)
• Surprising results some low paid as well as
  high paid occupations at top
• Hairdressers corporate managers
• We will problematize the interpretation of these
  tables

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Political economy perspective on job satisfaction

• Various approaches to well-being draw explicitly
  on political economy
• Amartya Sen
• Ben Fine
• Critical realism
• Activity theory
• We also draw on the consonant approach of Green
  (though not explicitly labelled by him as
  political economy)

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Overview

• Common themes in political economy view of
  well-being at work
• Stress on objective needs as opposed to
  subjective preferences
• Rejection of utility theory (ordinal and
  cardinal)
• Focus on qualitative development of individuals
  (and so their needs) through free creative
  activity

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Conception of job satisfaction

• No such thing as purely subjective utility
  (cardinal or ordinal)
• job satisfaction is not utility gained from a
  job
• Instead job satisfaction is
• internally related to objective job aspects
• hence itself qualitatively complex

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Conception of job satisfaction

• This conception consonant with Greens approach
  to job satisfaction surveys
• Reported job satisfaction (on Likert scale)
  reflects 2 things
• True job satisfaction
• Norms and expectations of respondents regarding
  jobs

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True vs. reported job satisfaction

• For the same level of true job satisfaction,
  then
• Lower norms and expectations lead to higher
  reported job satisfaction
• Higher norms and expectations lead to lower
  reported job satisfaction
• Reported job satisfaction may not accurately
  measure true job satisfaction!

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True vs. reported job satisfaction

• Do Roses league tables distinguish between
  true and reported job satisfaction?
• Reconsider near equivalent placing of
  hairdressers and corporate mangers at top of
  league tables of job satisfaction
• If
• norms and expectations of hairdressers are much
  lower than those of corporate managers
• then
• true job satisfaction may be much higher for
  corporate managers than for hairdressers

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Empirical work

• Our empirical work shows significance of our
  political economy approach to job satisfaction
• We uncover a robust u-shaped pattern of reported
  job satisfaction in earnings across British
  employees
• Based on data from WERS and BHPS
• Hitherto only seldom remarked upon (or puzzled
  over) in secondary literature

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U-shape relation
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U-shape relation
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U-shape relation
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U-shape relation
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U-shape relation
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U-shape relation
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U-shape relation
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U-shape relation
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U-shape relation
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U-shape relation
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U-shape relation
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U-shape relation
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U-shape relation
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U-shape relation
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U shapes in WERS2004
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Interpretation

• A utility interpretation of u-shape relation
  would be that those in high and low paid jobs are
  truly satisfied in their jobs
• But this has potentially counterintuitive policy
  implications it suggests that low paid jobs are
  truly conducive to high employee job satisfaction
  and therefore that these jobs should be
  encouraged!

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How should u-shape be explained?

• We suggest explanation in terms of norms and
  expectations
• Low earnings low norms and expectations matched
  by actual job
• Medium level earnings High norms and
  expectations not matched by job
• High earnings High norms and expectations
  matched by job
• Therefore only top third of earners can plausibly
  be argued to have high job expectations which are
  actually met by their jobs

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Implications of our interpretation

• Job satisfaction may therefore be truly high only
  in the high earnings category
• Disjuncture between reported and true job
  satisfaction for low earners
• The league tables do not seem to allow for
  disjuncture of true and reported job satisfaction

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Further support for explanation

• Existing qualitative research supports our
  hypothesis
• Low paid have low norms and expectations (Edwards
  and Burkitt, 2001)
• Low norms and expectations explain high reported
  job satisfaction of low paid (Tomlinson 2005
  Walters, 2005)
• Low paid satisficing as opposed to being truly
  fulfilled in their jobs (Walters, 2005)
• (More qualitative work required to develop and
  substantiate our argument)

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Conclusion

• So, is job satisfaction u-shaped in earnings?
• The robust statistical u-shape is not decisive
• Answer depends on concept of job satisfaction and
  its measurement
• YES, if true and reported job satisfaction are
  equivalent (economics of happiness Rose?)
• NO, if there is disjuncture between reported and
  true job satisfaction (Political Economy)

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Conclusion

• Conception of job satisfaction matters in terms
  of interpretation and understanding of job
  satisfaction data
• We would argue for political economy approach
  that is sensitive to both qualitative differences
  between jobs and norms and expectations of workers