multilevel analysis of workplace job satisfaction in Britain

Job satisfaction has been a fascinating theme of research in economics owing to
the link it is thought to have with such labour market behaviour of workers as
turnover and absenteeism; and their performance and/or productivity. What
determines job satisfaction? This paper undertakes a multilevel analysis of the
determinants of job satisfaction in Britain using linked employer-employee data
from the 2004 British Workplace Employment Relations Survey (WERS 2004).
It departs from previous studies on several counts. First, it employs multilevel
modelling as opposed to the commonly used estimation technique in the
literature. Second, it investigates the determinants of up to eight different facets
of job satisfaction, in addition to overall job satisfaction, thereby being able to
establish what determines which aspects of job satisfaction. Third, unlike most
previous studies it uses a whole host of correlates relating to employees and their
workplaces. Not many studies have used linked employer-employee data to study
job satisfaction, and the few studies that do have not exploited the nested
structure in such data. By using linked employer-employee data and by
exploiting the clustering therein this study is able to avoid the risk of misleading
‘statistically significant’ effects. The study finds that 1) unmeasured
heterogeneity is important for the most part. 2) Controlling for such unmeasured
effects, it finds that such factors as flexible work arrangement and better skills
match, among others, are crucial determinants of employees’ overall and other
facets of job satisfaction