Preference-respecting multi-dimensional well-being on the job: evidence from recent graduates

An important role of social and public policies is to encourage initiative of people to work and to provide employment for their citizens. Nevertheless, the role of these policies should not exclusively be concerned with the improvement in the quantity of jobs (i.e. ensuring the optimal employment rate) but likewise these policies should be designed to improve the well-being of workers by enhancing the quality of jobs for these workers. Although, it is difficult to spot the precise definition of job quality in the literature, one can reasonably argue that job quality is a multi-dimensional concept which includes the wage dimension but also non-wage (other) job dimensions such as job autonomy, job security, how interesting your job is, etc. Accepting the idea that a job quality is a multi-dimensional concept leads to the important question of aggregating these various job dimensions into an overall index of job quality which can be used as a measure of well-being on the job. Moreover, if we agree on the notion that the preferences of workers over job characteristics should be respected, then we have to find a proper way to weight these various job characteristics such that the construction of weights is consistent with the preference orderings over different jobs. A measure that satisfies the previous two requirements is known in the literature as the equivalent income (wage) measure. In this study we have applied the concept of equivalent wage to a specific sub-population of recent graduates (i.e. bachelor, master and doctoral students) who are presently participating at the labour market. In addition to the equivalent wage measure, we have used four other well-being measures which are wage, average preferences objective measure, equal weights objective measure and subjective job satisfaction measure. We have compared the following well-being measures on a large scale survey which consists of nineteen countries. Our results indicate that different measures of job quality will result in substantially different ranking of job quality across countries. In other words, this evidence points out that the choice of well-being measure for policy makers is utterly important for measuring job quality. We have also analysed the gender differential in job quality across countries by using wage and equivalent wage measure. These results are first illustrated at the mean and then we have provided a more detailed picture which has shown the wage and equivalent wage differentials across the distribution. The evidence we have found indicate that in majority of countries, the quality of jobs is higher for men. In addition, after we have computed the equivalent wage measure we have used this information in order to retrieve the willingness-to-pay for each non-wage job characteristic. We have compared the gender differences in the willingness-to-pay across and within countries. Lastly, we presented the decomposition the total willingness-to-pay on the contributions attributed to each non-wage job characteristic. We have found that across countries for both men and women, having a good career prospect is relatively the most important job characteristic while job security is relatively the least important job characteristic.