Do Career Prospects Make Happy Workers? Evidence from Panel Data

Abstract

This paper investigates the relationship between career profile, job tenure, earnings and job satisfaction utilising the British Household Panel Survey Dataset (BHPS). Career status is modelled as an endogenous variable, subject to an initial job choice and the potential endogeneity of the tenure-earnings and tenure-job satisfaction relationship is taken into account by the use of instrumental variable estimation. It is found that job satisfaction of individuals employed in jobs with career prospects is not only higher compared with those who are not, but also that their returns to tenure in terms of job satisfaction are significantly higher.