Socio-Economic Differences in the Perceived Quality of High and Low-Paid Jobs in Europe

This paper engages in a novel comparison of differences in the perceived quality of high and low-paid jobs across six European labour markets. Utilizing data from six waves (1996-2001) of the European Community Household Panel (ECHP), and after correcting for the selectivity problem that is prevalent in the study of the effect of low pay status on job satisfaction, it is shown that, other things equal, low-paid employees are significantly less satisfied with their jobs compared to those who are high-paid in Greece, Spain, and Finland. In contrast, there appears to be an insignificant difference in the satisfaction of high and low wage workers in the United Kingdom, France and Denmark. The empirical evidence therefore suggests that low-paid jobs in the EU are not universally of low quality, though in some countries low wage workers have experienced the full brunt of both lower paid and bad quality jobs. For these countries policies that centre on the quality of jobs would be of equal importance to those that focus on the level of pay. A homogeneous policy of removing low wage employment through regulation, however, would not necessarily lead to improvement in the welfare of low-paid citizens across all European economies.