Low Pay, Higher Pay and Job Satisfaction within the European Union: Empirical Evidence from Fourteen Countries

28 Pages Posted: 19 Apr 2005

See all articles by Luís Díaz-Serrano

Luís Díaz-Serrano

National University of Ireland, Maynooth; IZA Institute of Labor Economics

José António Cabral Vieira

University of the Azores - Department of Economics and Business; IZA Institute of Labor Economics

Date Written: April 2005

Abstract

We examine differences in job satisfaction between low- and higher-paid workers within the European Union (EU). We use The European Community Household Panel Data covering the period 1994-2001. Our results indicate that low paid workers report a lower level of job satisfaction when compared with their higher paid counterparts in most countries, except in the UK. This supports the idea that low-wage employment in these countries mainly comprises low quality. The results also indicate that the gap in average job satisfaction between low- and higher-paid workers is markedly wider in the Southern European countries than in the rest of EU. Finally, there are significant differences in the determinants of job satisfaction across countries. It seems then that a homogeneous policy may be inappropriate to increase satisfaction, and hence labour productivity, in the EU as a whole. Hence, an improvement of the quality of the jobs in the EU may require different policies. In particular, in some countries such as the United Kingdom removing low employment, namely through regulation, may worsen the workers' well-being, although in other cases such a policy may lead to a totally different outcome.

Keywords: job satisfaction, job quality, low-wage employment

JEL Classification: J28

Suggested Citation

Díaz-Serrano, Luís and Cabral Vieira, José António, Low Pay, Higher Pay and Job Satisfaction within the European Union: Empirical Evidence from Fourteen Countries (April 2005). IZA Discussion Paper No. 1558. Available at SSRN: https://ssrn.com/abstract=702889

Luís Díaz-Serrano (Contact Author)

National University of Ireland, Maynooth ( email )

2nd Floor
Iontas Building
Maynooth, County Kildare W23 F2H6
Ireland

IZA Institute of Labor Economics

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

José António Cabral Vieira

University of the Azores - Department of Economics and Business ( email )

9501-801 Ponta Delgada Azores
Portugal

IZA Institute of Labor Economics

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

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