How do Workers Decide their Jobs? The Influence of Income, Wage and Job Characteristics

This paper provides results on the economic decision-making process of Spanish workers, who decide their jobs from the effects of variations in the non-wage income, the wage and the prices of non-pecuniary job characteristics. To that end, we formulate a non-separable generalization of the Linear Expenditure System (NLES) as a joint model of labor supply and job characteristics demand, estimated separately for both males and females, using a 1991 Spanish survey. The main results show that: (i) some job characteristics have a positive effect on the wage, whereas others have a negative effect; (ii) the average percentage effect of employer size and the complexity index are higher for males than for females, with the fatal accident risk displaying similar values; (iii) if the non-wage income of every worker increases, these individuals will prefer to devote less hours to work, and will also prefer jobs in smaller companies and with a lower risk; and (iv) if the wage and hedonic prices of non-pecuniary job characteristics increase, then both males and females will prefer to reduce their labor supply, and devote their available time to jobs in bigger firms, with a higher risk and complexity. Copyright © 1999 John Wiley & Sons, Ltd