A multilevel analysis of job satisfaction in Britain - WERS 2004

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worker sorting. Secondly, only few studies have explored the determinants ofvarious facets of job satisfaction, at least in the context of WERS, and nonelooked at eight different such facets. This, despite the importance attached toexploring the various facets of job satisfaction which has been stressed in somestudies (Rose 2001, Van Praag et al. 2002). Third, with few exceptions moststudies on job satisfaction have not used correlates of job satisfaction relatingboth to the employee and the workplace; and most of those that do fail to accountfor clustering in the data, which is likely to lead to misleading ‘statisticallysignificant’ effects.This study attempts to fill the gap in the existing literature in at least twoimportant ways. First, it uses linked employer-employee data and is able toaccount for a whole range of correlates of job satisfaction that relate to both theemployee and the employer. 3 Most studies in the job satisfaction literature havenot had the tantalising opportunity provided by the rich WERS 2004 data toanalyse the determinants of job and workplace satisfaction as this study does.Second and more importantly, this study uses a methodology that is mostappropriate to the data and the issue at hand; a methodology that exploits thenested structure of the WERS 2004 data, something that has not been usedpreviously. This allows extricating both observable and unobservable influenceson satisfaction at the employee and workplace level. That this paper explores upto eight different facets of job satisfaction alongside overall job satisfaction isalso another strength this study has. This enables determining whether jobsatisfaction is a single entity, as much of the literature makes it out to be, or not.The rest of the paper is organised as follows. In section 2, a brief review of theexisting literature will be made. In section 3, a description of the data andvariables used will be given. Section 4 sets out the empirical model used in theestimation. In section 5, results from the empirical exercise will be discussed.The final section concludes the paper.2. The literature on job satisfactionThe vast literature on satisfaction has attempted to establish the determinants ofjob satisfaction by modelling reported indicators of job satisfaction as a functionof a range of employee, employer and other job related correlates. The mostcommonly used such correlates include level of pay, hours of work, a whole hostof demographic and human capital characteristics, work environment, unionmembership. Though very few, there are also some studies that have used genderand racial segregation in a workplace as possible determinants of job satisfaction.This section attempts to make a brief review of the literature by way ofsummarising what it offers regarding the determinants of job satisfaction.With regards to demographic and human capital characteristics; the weight ofexisting evidence suggests a U-shaped relationship between age and jobsatisfaction (Clark, 1996, Clark et al. 1996, Sloane & Ward 2001) although thereis some evidence that satisfaction increases with age (e.g. Shields & Price 2002).The existing evidence also suggests that women are more satisfied with their job3 It is worth stating that some of these correlates are unique to the WERS 2004 data.4
than men (Clark, 1996, 1997; Clark & Oswald 1996, Blanchflower & Oswald1999; Groot & Brink 1999, Sloane & Williams 2000) but based on a corssnationalstudy Sousa-Poza & Sousa-Poza (2000) find this to be largely an Anglo-Saxon phenomenon. Higher level of education is generally associated with lowerlevel of job satisfaction (Clark 1996, Clark & Oswald 1996, Clark et al. 1996).Blanchflower & Oswald (2001) and Clark (1997) find some evidence attesting tohigher levels of job satisfaction for married individuals but Shield & Price (2002)find no such evidence. There is also some evidence relating to the effect of healthcondition on job satisfaction where Clark (1996) finds that health problems leadto lower level of job satisfaction.In terms of job related characteristics, income is probably the most widely usedcorrelate. Clark (1997) and Shields & Price (2002) find that income is animportant determinant of both overall job satisfaction and satisfaction with pay.Others, for example Clark and Oswald (1996), find weak correlation betweenabsolute income and job satisfaction while Belfield and Harris (2002) find noevidence that links job satisfaction with absolute income. However, there seemsa consensus on the link between ‘relative’ income and job satisfaction. 4 Anumber of studies including Clark and Oswald (1996), Levy-Garboua &Montmarquette (1997), Neumark & Postlewaite (1998), Sloane & Ward (2001),Hamermesh (2001), and Shield & Price (2002) find relative income as having aneffect on job satisfaction. Lydon & Chevalier (2002), on the other hand, questionthe validity of the notion of ‘relative’ income and estimate a satisfaction equationthat addresses issues of wage endogeneity, finding a strong effect of wages(current as well as future) on job satisfaction.As well as income and/or wage, hours of work has been found to impact jobsatisfaction. Clark (1996) finds hours to have a significant negative effect onoverall job satisfaction and an even stronger negative effect on satisfaction withpay. Union membership has, for the most part, been found to have a strongnegative effect on job satisfaction (Freeman 1978, Borjas 1979, Meng 1990,Miller 199). However, accounting for endogeneous selection as well asindividuals and firm level heterogeneity, Bryson et al. (2004; 2006) find nomarked difference in job satisfaction between unionized and non-unionizedworkers.With regards to workplace size the evidence is that larger establishment size isassociated with lower level of satisfaction (Idson 1990, Clark 1997, Gazioglu &Tansel 2006). Not much evidence exists regarding the relationship between jobsatisfaction and workplace segregations of different sorts. Bender et al. (2005)look into gender segregation and its effect on job satisfaction. They conclude thatprevious evidence suggesting an increase in the level of job satisfaction ofwomen as the share of women at the workplace increases was due to exclusion ofimportant determinants of jobs satisfaction such as flexibility between work andhome. Maume and Sebastian (2007) explore the effect of workgroup racialcomposition on the job satisfaction of white workers drawing on a broad 2002cross-section of workers in the US. 5 They find that an increase in the number of4 In Clark and Oswald (1996) ‘relative’ income is taken as the average income level of workerswith similar characteristics while Hammermesh (2001) regards ‘relative’ income as surprises thatmake an individual worker well off.5 The supposition here is that work is fundamentally a ‘social phenomenon’ and that it is at theworkplace, more than in other settings (such as neighbourhoods, schools, and churches) that5
Page 1 and 2: [Very Preliminary Draft]A multileve
Page 3: 1. IntroductionEconomists ventured
Page 7 and 8: ‘overall’ as well as each of th
Page 9 and 10: measure of job satisfaction. 12 By
Page 11 and 12: other hand, having skills that are
Page 13 and 14: 6. ConclusionThis paper has investi
Page 15 and 16: Sales and customer service occ. -0.
Page 17 and 18: (0.269) (0.416) (0.298) (0.288) (0.
Page 19 and 20: Table 1 (cont’d)Sats. with influe
Page 21 and 22: Able to work flexible hrs 0.767 0.8
Page 23 and 24: (0.193) (0.332) (0.250) (0.292) (0.
Page 25 and 26: (0.231)** (0.383) (0.306) (0.196)**
Page 27 and 28: 100 women working p-t -0.361 -0.367
Page 29 and 30: ReferencesAbowd JM, Kramarz F and M
Page 31 and 32: Kersley B., Alpin C., Forth J., Bry
Page 33 and 34: AppendixTable A1 Descriptive statis
Page 35: I am the only one doing the job 0.0

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