Purpose – The objective of this paper is to analyse the role of adverse working conditions in the determination of individual wages and job satisfaction in the Finnish labour market. Design/methodology/approach – The paper uses estimation of econometric models for wages and job satisfaction scores by using the Quality of Work Life Survey of Statistics Finland. Findings – The paper finds that adverse working conditions have a very minor role in the determination of individual wages. In contrast, adverse working conditions substantially decrease the level of job satisfaction and the perception of fairness of pay at the workplace. This evidence speaks against the existence of compensating wage differentials, but is consistent with the view that the Finnish labour market functions in a non‐competitive fashion. Practical implications – Provides useful information for improvement of working conditions. Originality/value – Very few papers have analysed the data sets that include, besides wages and job satisfaction scores, detailed information on several different aspects of self‐reported working conditions at the workplace, not just conditions typical of some occupations or industries.
International Journal of Manpower – Emerald Publishing
Published: Apr 1, 2006
Keywords: Pay differentials; Job satisfaction; Conditions of employment
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