Job Satisfaction, Wage Changes and Quits: Evidence from Germany

Posted: 5 Jan 1999

See all articles by Andrew Clark

Andrew Clark

Paris School of Economics (PSE); IZA Institute of Labor Economics

Yannis Georgellis

University of Kent

Peter Sanfey

European Bank for Reconstruction and Development (EBRD)

Abstract

This paper uses data from ten waves of the German Socio-Economic Panel to examine the effect of wages and job satisfaction on workers' future quit behavior. Our results show that workers who report dissatisfaction with their jobs are statistically more likely to quit than those with higher levels of satisfaction. The cross-sectional distribution of job satisfaction responses thus contains information that enables us to predict workers' future behavior. This result is remarkably robust to specification changes and to estimation methods that account explicitly for unobserved heterogeneity. We find some evidence for males that wage changes are a better predictor of quits than wage levels, consistent with comparison effects stressed in the psychology literature.

JEL Classification: D10, J28, J63

Suggested Citation

Clark, Andrew Eric and Georgellis, Yannis and Sanfey, Peter, Job Satisfaction, Wage Changes and Quits: Evidence from Germany. Available at SSRN: https://ssrn.com/abstract=132109

Andrew Eric Clark (Contact Author)

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Yannis Georgellis

University of Kent ( email )

Canterbury, Kent CT2 7PE
United Kingdom

Peter Sanfey

European Bank for Reconstruction and Development (EBRD) ( email )

One Exchange Square
London, EC2A 2JN
United Kingdom
+44 20 7338 6227 (Phone)
+44 20 7338 6110 (Fax)

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