Research Paper LoWER Working Paper Series 7
Measuring the quality of jobs
Within Europe there has been concern not only about the quantity of available work, but also about the quality of jobs, as many new jobs have been part-time or only of temporary duration. However, jobs consist of a number of elements. Thus, Beatson (2000) distinguishes between the economic contract which defines the effort/reward relationship and the psychological contract which defines the relationship between employer and employee in terms of working conditions. A further distinction can be drawn between extrinsic job characteristics, such as financial rewards, working time, work/life balance, job security and opportunities for advancement and intrinsic job characteristics such as job content, work intensity, risk of ill health or injury and relationship with co-workers and managers. Beatson (2000) argues that because of the diversity of these characteristics it is not possible to reduce them to a single dimension in order to rank the range of jobs according to their quality.
In this paper we reject the view that it is not possible to measure job quality and attempt to proxy job quality by drawing from two contrasting strands of the literature - that on labour market segmentation and that on job satisfaction. The labour market segmentation literature finds its most extreme formulation in the dual labour market hypothesis. The essentials of this model are that there are two (at least) distinct labour markets. Whilst workers compete within each market they do not compete across them as there are barriers to mobility between them. It is further argued that we can classify jobs into good and bad jobs with the former not only having better working conditions, but also higher pay than the latter. This contrasts with the theory of compensating differentials in which jobs with poor working conditions would be expected, ceteris paribus, to compensate for this with higher pay. Consistent with this approach we split our sample into two segments, first on the basis of whether or not workers have promotion prospects and second on the basis of whether or not they have low paid jobs, defined as less than two thirds of the median. We then examine briefly the extent of working across these segments.