Job satisfaction and target earnings

Abstract

The starting point of this paper is the idea that individuals are characterized by hierarchical behaviour. This idea, which is quite popular in other social sciences, implies that the individual sets priority targets which are ordered in terms of urgency or importance. The paper tests the hypothesis in the context of a utility-from-work framework. In particular, the paper uses data on a random sample of British workers who report levels of satisfaction from their work. The empirical results indicate the presence of hierarchical behaviour. In particular, workers earning below the target level get more satisfaction than those earning above the target level.