The Factors Driving Employee Salaries: Determining Their Weights across Industries

This thesis seeks to understand the relationships between salary, non-monetary factors, and job satisfaction in the labor market. It applies lessons from both economic theory and sociological research as it contextualizes and studies these different aspects of the labor market. In a regression comparing salary and non-monetary factors, only two out of 16 dummy variables are statistically significant. Both are positive work conditions, but Benefits (Positive) decreases salary and Long Hours (Positive) increases salary. In a regression comparing salary and job satisfaction, no statistical significance is found, despite sociological research connecting the two aspects of work. Issues relating to limited sample size, subjective coding methodology, and the possibility of salary acting as an independent variable are discussed when explaining the lack of statistical significance. However, in line with the hypothesis and sociological research, six out of 16 dummy variables for nonmonetary factors are found to be statistically significant with job satisfaction, with five of them at the 1% significance level. The implications of these statistically significant variables are discussed for both employees and employers. Opportunities for further research are identified in the use of personal employee information, the impact of management, and the distinct categories of happiness.