Differences in Job Dissatisfaction across Europe

Using the European Community Household Panel, this paper analyzes the determinants of job dissatisfaction in a European cross-country setting. We find big differences in the reported job dissatisfaction across countries which seem due, at least in part, to cultural diversity. We explain job dissatisfaction by using variables measuring different job characteristics (earnings, job security, type of work, hours of work, working timing, working conditions and environment, and distance and commuting) and the rank by importance of these job characteristics seems quite similar across countries. Type of work and earnings are the most important determinants of job dissatisfaction in all countries. Moreover, it seems that satisfaction measures with different job characteristics are more significant in explaining job satisfaction than objective measures. There are two potential explanations for this result. First, satisfaction measures may depend on personality traits and mood and this dependence can cause a spurious association between job satisfaction and other satisfaction measures. Second, job satisfaction is a relative measure and, as such, it is probably better explained by earnings, or other job characteristics, relative to a comparison level. Since satisfaction measures with different job characteristics are relative measures, they better explain job satisfaction. NON-TECHNICAL SUMMARY One of the most popular questions about happiness is: does money make people happier and, if yes, is it the main determinant of happiness? In this paper we try to answer to this question by looking at the relationship between earnings and job satisfaction in a European cross-country setting. For our empirical analysis we use the European Community Household Panel Survey that provides comparable information on job satisfaction measures for 11 European Union countries (Austria, Belgium, Denmark, Finland, France, Greece, Ireland, Italy, the Netherlands, Portugal and Spain) covering the period 1994-2000. Each interviewed person is asked to report how satisfied he/she is in a six-point scale, from not at all satisfied (level one) to fully satisfied (level six). Looking at people reporting a job satisfaction lower or equal than three, say dissatisfied people, we find substantial differences between countries. In Denmark and in Netherlands, for example, only 6.4% and 6.9% of people are dissatisfied with their jobs, whereas in Greece and in Italy the percentages increase to 29.6% and 38.6%. The differences in reported job dissatisfaction across countries seem in part explained by cultural diversity. The factors explaining job dissatisfaction seem instead more similar across countries. We explain job dissatisfaction by using measures of satisfaction with seven different job characteristics: earnings, job security, type of work, hours of work, working timing, working conditions and environment, and distance and commuting. The ranking by importance of these job characteristics seems comparable across countries. Measures of satisfaction with the type of work and earnings are always among the most relevant explanatory variable in all countries. The least relevant explanatory variables are instead given by satisfaction measures with job commuting/distance, working times and number of working hours. In conclusion, the estimated relationship between earnings and job satisfaction suggests that money can buy happiness.