Does Relative Occupational Prestige Matter for Job Satisfaction? Evidence from Germany

Sammanfattning

The role of comparison income in job satisfaction has been studied intensely using different definitions of reference groups and various estimation methods, resulting in many findings regarding this relationship. However, comparison income represents an indicator of social status and the rank of a person in society. In this study, we examine the possibility of replacing it with prestige, which is defined as a social status indicator based on occupation. We estimate a model using individual, state, and year fixed effects, including several control variables related to the characteristics and circumstances of the individuals. This allows us to observe the situation of the same person throughout the years. Data are drawn from a large German panel known as the GSOEP. The results show a statistically significant positive association between subjective prestige and job satisfaction, and a negative association between relative prestige and job satisfaction. Many robustness checks were conducted, such as using different regression models and alternative methods to calculate relative job prestige; almost all of them show robust results. The main reference group includes people in the same age and education range, from the same state, in the same year. A heterogeneity test was conducted using four subsamples, where observations were sorted by gender and marital status. Single females and married males show a positive association between subjective prestige and job satisfaction. In contrast, single males and females show a negative and statistically significant association between relative prestige and job satisfaction.