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Job satisfaction and relative income in economic transition: Status or signal?: The case of urban China
Authors:Wenshu GAO  Russell SMYTH
Institution:1. Institute of Population and Labour Economics, Chinese Academy of Social Sciences, China;2. Department of Economics, Monash University 3800, Wellington Road, Clayton, Australia
Abstract:We use two datasets for urban China to examine whether an increase in reference group income lowers or increases job satisfaction. The former is consistent with a status effect — an increase in the income of others lowers my satisfaction because I feel jealous. The latter is consistent with a signal effect — an increase in the income of others might make me jealous, but it also provides an information signal about my future prospects. When we use a single item indicator of job satisfaction we find no support for a status or signal effect; however, when we use a psychometrically valid instrument to measure job satisfaction, we find some support for the existence of a status effect. We consider the components of job satisfaction through which the status effect operates. We find that the status effect operates through satisfaction with co-workers, operating procedures, pay and supervision.
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