| This research investigates the influence of work environment on human capital earnings models. In particular, the work environment variable which is represented by job satisfaction and work motivation measures is explicitly included into standard human capital models previously introduced by Becker, Mincer, and Chiswick. The human capital earnings models assume that people are paid a wage equal to the (real) marginal product which varies over individuals because of differences in inherited or acquired skill levels.;This study utilized subjective variables, namely job satisfaction and job motivation to represent unobserved objective work environment variables. Such variables are chosed for the study because they first, contain both physical and psychological aspects of working conditions. Secondly, there are key theories and studies in organization and industrial psychology which deal with the relationship between conditions of work and productivity.;The data set chosen for empirical examination is the 1972-73 Quality of Employment Survey conducted by the University of Michigan's Institute for Social Research. It is the most definitive work to date on the dimensions of job satisfaction.;The area being investigated is both complicated and new territory. It is to be hoped that present research will at least serve to provide a strong indication of the importance of such proxies for work environment. It also serves as an exploratory study for future research in this area. Although the inclusion of work environment constitutes only an initial step toward a more complete analysis, it provides a new aspect for inclusion in the structure of earnings model. In terms of policy, the finding from this study may provide a rationale for commitment to a program to improve the work environment or the quality of work life in the organization.;Work environment may affect an individual's ability to work, however, it has been excluded from the previous studies mainly because most data sets do not contain work environment information. The environment sets which have been investigated by previous researchers are school and home environment. Only recently, there has been some studies which attempt to incorporate work environment into the earnings equation. They, however, mainly concentrate on the physical working conditions. |
