Relative Income and Job Satisfaction in Chile

In this chapter, we study the determinants of job satisfaction in Chile. In particular, we focus on the relationship between income and job satisfaction that has been little studied in developing countries. Using data from the Oxford Poverty and Human Development Initiative (OPHI) we find a positive and concave relationship between income (wage) and job satisfaction. Regarding relative income, we find a negative relationship between the income of a reference group and individual job satisfaction. This can be understood as the predominance of the comparison effect, where an individual's job satisfaction decreases with the income of his/her peers.