Elsevier

Journal of Public Economics

Volume 61, Issue 3, September 1996, Pages 359-381
Journal of Public Economics

Satisfaction and comparison income

https://doi.org/10.1016/0047-2727(95)01564-7Get rights and content

Abstract

This paper attempts to test the hypothesis that utility depends on income relative to a ‘comparison’ or reference level. Using data on 5,000 British workers, it provides two findings. First, workers' reported satisfaction levels are shown to be inversely related to their comparison wage rates. Second, holding income constant, satisfaction levels are shown to be strongly declining in the level of education. More generally, the paper tries to help begin the task of constructing an economics of job satisfaction.

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