Job quality and labour market
PERFORMANCE
CEPS Working Document No. 330/June 2010
Christine Erhel and Mathilde Guergoat-Larivière*
1. Introduction: How to define job quality
In labour economics, job quality was traditionally understood as being represented by the wage
level, while in some sociological or industrial relations studies, it was related to working
conditions. But recent developments in economics and socio-economic approaches propose
additional dimensions to the definition of job quality.
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Developments in human capital theory recognise the heterogeneity of both jobs and workers,
and one step can be made to differentiate job quality according to the skills involved in
particular jobs or the skill-match between workers and jobs. At the macro level, market failures
can lead to underinvestment in human capital, so that investment and participation in education
and training activities could be seen as an indicator of employment quality.
In the recent framework of the “economics of happiness” (Layard, 2005), the approach to job
quality is enriched by the consideration of workers’ points of view through the development of
surveys into job satisfaction and workers’ well-being. Such surveys make it possible to
determine the dimensions of job quality by asking people what is more important to them. For
instance, according to ISSP data (Clark, 2005), “job security” and an “interesting job” are “very
important” for a majority of people, and seem to prevail over items like “being allowed to work
independently”, “good opportunities for advancement”, and “high income”. According to such
studies, it appears that the absolute wage level is not so important. Comparison effects and habit
effect dominate: workers are unhappy if they are paid less than their colleagues or peers (other
things being equal), and wage rises only have a transient effect. These results suggest that
decent living standards, wage equity, and good wage mobility could be taken as indicators of
employment quality. A modern definition of job quality should also include the impact of
employment on other spheres of life. Indeed, the possibility of reconciliation between work and
family life appears to be a very important dimension of job quality according to workers’
responses to the European Social Survey. This is also consistent with policy-oriented
approaches, like the “transitional labour market” perspective (Schmid and Gazier, 2002;
Schmid, 2006), which stresses the importance of out-of-work quality dimensions, such as the
right to training, to occupational redeployment or retraining, to family life, and to decide one’s
working hours throughout the life cycle.
The recent framework suggested by Green (2006) integrates these results and recognises the
multi-dimensional character of job quality. Indeed, this author studies job quality through the
evolution of different dimensions - including skills, work effort and intensification, workers’
discretion, wages, risk and job insecurity, and workers’ well-being - and thus takes into account
the multidimensional nature of job quality.
* Christine Erhel is a researcher at the French Centre d’Etudes de l’Emploi and Associate Professor at the
University Paris 1 Panthéon-Sorbonne. Mathilde Guergoat-Larivière is a doctoral student at University
Paris 1- Panthéon Sorbonne, and a Junior Research Fellow at CEE.