‘Bread for all, and Roses, too’: satisfaction with job stability and pay among young Italian workers

Over the last 20 years, the Italian labour market has seen increasing unemployment, job contract instability and lower wages as a result of the global economic crisis and the policies fielded by successive governments to reduce labour market rigidities, regarded as the primary cause of high unemployment, for young people and women in particular. This paper analyses young workers’ job satisfaction. Job satisfaction is relevant for workers’ well-being, but it has also been shown to affect workers’ productivity and hence firms’ performance. We analyse overall job satisfaction and satisfaction for two job dimensions, stability and pay. We contribute to the existing literature by investigating whether job stability can compensate for a lower wage and whether the opposite is true, i.e. if a higher pay can compensate for job instability. Our findings show that overall job satisfaction is affected only by pay level. However, when we consider satisfaction with stability and pay satisfaction jointly, the type of contract seems to be more relevant than the pay in determining the probability of being either satisfied or dissatisfied with both dimensions. Therefore, if different dimensions of satisfaction are considered, both stability and pay are relevant, and there appears to be no compensating effect.