Are More Satisfied Workers Earning More? Depends on the Age

45 Pages Posted: 16 Nov 2016 Last revised: 16 Dec 2016

See all articles by Eun Jordan

Eun Jordan

University of Oklahoma

Myongjin Kim

University of Oklahoma - Department of Economics

Leilei Shen

Kansas State University - Department of Economics

Date Written: June 1, 2016

Abstract

In this paper we study the relationship between job satisfaction and wages using data from the 2013 Scientists and Engineers Statistical Data System (SESTAT). Job satisfaction is positively correlated with wages, however, this effect diminishes as job satisfaction increases, suggesting more satisfied workers are not earning more. This non-monotonic effect is particularly strong in the 20-39 age group. We find that one standard deviation increase in job satisfaction from the 25th percentile is associated with a 12.3% increase in wages, while one standard deviation increase in job satisfaction from the 75th percentile is associated with a 7.3% change in wages. These patterns are consistent with a search and matching model that imposes a negative search cost for higher wages, but less reward in higher wages from a concave utility function in wages.

Keywords: Education and Job Match, Job Satisfaction, Wages

JEL Classification: J24, J28, J30, J31, M54

Suggested Citation

Jordan, Eun and Kim, Myongjin and Shen, Leilei, Are More Satisfied Workers Earning More? Depends on the Age (June 1, 2016). Available at SSRN: https://ssrn.com/abstract=2869973 or http://dx.doi.org/10.2139/ssrn.2869973

Eun Jordan

University of Oklahoma ( email )

307 W Brooks
Norman, OK 73019
United States

Myongjin Kim

University of Oklahoma - Department of Economics ( email )

308 Cate Center Drive
Norman, OK 73019-2103
United States

Leilei Shen (Contact Author)

Kansas State University - Department of Economics ( email )

Manhattan, KS 66506-4001
United States

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