Abstract
In this chapter, we study the determinants of job satisfaction in Chile. In particular, we focus on the relationship between income and job satisfaction that has been little studied in developing countries. Using data from the Oxford Poverty and Human Development Initiative (OPHI) we find a positive and concave relationship between income (wage) and job satisfaction. Regarding relative income, we find a negative relationship between the income of a reference group and individual job satisfaction. This can be understood as the predominance of the comparison effect, where an individual's job satisfaction decreases with the income of his/her peers.
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Notes
- 1.
- 2.
Van Praag and Ferrer-i-Carbonell (2008) have proposed the probit-adapted OLS approach which consists of cardinalizing the dependent variable in order to apply the standard ordinary least squares estimator. Their results show that compared with an ordered probit model, the probit-adapted OLS provides similar results in terms of the estimated trade-off ratios. The main advantage of the probit-adapted OLS approach is that it is simpler in computational terms than standard ordered probit model while yielding equivalent results. This estimation method is especially attractive when working with more complicated models.
- 3.
From combining these variables’ information we obtain 87 cells (there was some empty cells) and calculate the average wage for each one.
- 4.
More recently an effort has been made to get an endogenous reference group by asking individuals who they compare themselves to (Clark and Senik 2010). Unfortunately this type of information is not available for Chile.
- 5.
The authors suggest construct the rank as follow:
$$ {R}_{ig}=\frac{P_{ig}-1}{N_g-1} $$where P ig is the position of individual i in group g, and Ng is the number of individuals in the group.
- 6.
The OPHI is a research institute within the University of Oxford’s Department of International Development. Its aim is to build and promote a more systematic methodological and economic framework for reducing poverty grounded in Amartya Sen’s capability approach. OPHI has identified and developed short modules to measure five missing dimensions of poverty: employment quality, empowerment or agency, physical safety, the ability to not be shamed, and psychological and subjective well-being.
- 7.
The CASEN (Caracterización Socioeconómica Nacional) is a nationally representative cross-section survey and is a fundamental tool for social policy because it contains valuable information on Chilean families regarding housing, education, health, and employment.
- 8.
We have lost eight observations in constructing reference group income with this methodology.
- 9.
Results do not change when we include the additive dummies.
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Montero, R., Rau, T. (2016). Relative Income and Job Satisfaction in Chile. In: Rojas, M. (eds) Handbook of Happiness Research in Latin America. International Handbooks of Quality-of-Life. Springer, Dordrecht. https://doi.org/10.1007/978-94-017-7203-7_13
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