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Job Satisfaction, Wage Changes and Quits: Evidence from Germany

Andrew Clark (), Yannis Georgellis () and Peter Sanfey

Studies in Economics from School of Economics, University of Kent

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 behaviour. 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 which enables us to predict workers' future behaviour. 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.

Keywords: Quits; Job Satisfaction; Relative Utility; Wage Profiles (search for similar items in EconPapers)
JEL-codes: D10 J28 J63 (search for similar items in EconPapers)
Date: 1997-12
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Published in Research in Labor Economics, 1998, 17, p.95-121

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