Measuring Job Quality: A Composite Indicator

Giovanna Boccuzzo, Martina Gianecchini

Abstract The aim of the paper is to propose a methodology for designing a composite
indicator of job quality, which considers objective characteristics of the job (e.g. salary,
level of autonomy, working hour arrangements) for the construction of the dimensions
and a subjective evaluation of the same attributes for the construction of weights. The
composite indicator of job quality is based on three dimensions (economic,
professional, work-life balance) which are leveraged by the firms in designing the
workers activities. In order to test and validate the indicator, the job quality of a
sample of recent Italian graduates has been measured. Some applications of the
indicator (for the individuals, the firms, and the educational system) are proposed.

1 Job quality: its relevance, definition and measurement

The issue on job quality is part of the Europe 2020 agenda: the targets related to the
increase in employment rate and education level of younger workers imply concrete
actions in order to ensure decent working conditions and to improve flexibility and
security in the national labour market.
There are three general approaches to measuring job quality [1]. The first strategy
(pure subjective approach) focuses on the well-being of the worker. Generally, job
satisfaction is considered as a proxy for the individual well-being. The second strategy
(mixed subjective approach) considers job quality as a multifaceted construct,
introducing objective measures of job quality together with their subjective evaluations:
the workers are required to rank the job attributes they consider important when
defining what is an ideal good job. The third strategy (objective approach) defines
the job quality as a sum of objective dimensions (such as contractual length, pay, health

Giovanna Boccuzzo, Department of Statistical Science, University of Padua; email:

giovanna.boccuzzo@unipd.it
Martina Gianecchini, Department of Economic Science Marco Fanno, University of Padua;
email: martina.gianecchini@unipd.it

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Giovanna Boccuzzo, Martina Gianecchini

and safety at work) derived from the existing literature about the impact of job
attributes on workers well-being.
We propose an alternative approach, assuming that 1) the job quality is a
multifaceted concept based on a limited number (three) of dimensions, 2) each worker
subjectively evaluates each dimension according to his needs and motivations.
We define three relevant dimensions of job quality. The economic dimension
concerns all the aspects that are related to the economic exchange between the worker
and the employer, and that are generally included in the formal employment contract.
The professional dimension is related with the characteristics of the job which
influences the workers human capital accumulation by enhancing their employability.
The work-life balance dimension involves the aspects that affect the workers personal
life and the aspect of work relationships.

2 Data and methods: the design of the composite indicator

The study was conducted on a sample of Italian graduates in 2007 and 2008. The data
belong to the Agor longitudinal survey on the career outcomes of graduates from
University of Padova [2]. Respondents were interviewed after 6, 12 and 36 months
from graduation, using a CATI (Computer Assisted Telephone Interview) technique.
Workers were required to give a wide range of information about their current job, the
job search activities, the perception of skill and educational mismatch, and the
evaluation of their educational program.
The total number of people who were interviewed 36 months after graduation
amounted to 2,885. Among them, only the employed (2,436) were considered in our
research. The sample is composed for the 56.3% by female, and the 57.6% reached a
master degree. Almost half of the sample (45.6%) does not live with their parents, and
among them the 45.6% is married.
As a first step in designing the composite indicator, we defined a set of job
attributes which would reflect the objective side of each dimension. The economic
dimension is given by the wage, measured as hourly wage standardised in 0-1 interval
(values below 3rd percentile and above 97th percentile were truncated), and contractual
stability, measured as the arithmetic mean of two dichotomic variables: dependent
employment (yes=1) and open-ended contract (yes=1). The economic dimension is then
measured as the mean of the indicator of wage and the indicator of contractual stability.
The professional dimension is measured as the arithmetic mean of six dichotomic
variables: usefulness of the degree, coherence between degree and work, supervision of
team work, promotion opportunities, being in a team work, enhancing of skills. The
work-life balance dimension is the mean of the distance between home and work (home
and workplace in the same province=1) and the working hours, standardised between 0
(highest number of working hours) and 1 (lowest number of working hours).
The three dimensions are slightly or not correlated: the highest correlation is
observed between economic and professional dimension (r=0.2026), whereas the
correlation between economic and work-life balance is null, and the correlation
between professional and work-life balance is negative (r=-0.1839).
The second step in the creation of the composite indicator relates to the weighting
procedure. The weight assigned to each dimension of job quality is calculated assuming

Measuring Job Quality: A Composite Indicator

3

that a poor job quality may be a reason to job dissatisfaction. Respondents were
required to express their level of job satisfaction (on a range between 1 and 10) for the
job as a whole and referring to a set of job characteristics. Weights are the regression
coefficients obtained via a ordinal logistic regression model (pseudo R2=0.487), where
the dependent variable is the level of overall job satisfaction and the explanatory
variables are the satisfaction for the objective job attributes included in the
dimensions. Dimensions are weighted using the arithmetic mean of the regression
coefficients which refer to job attributes related to each dimension.
The Job Quality Indicator (JQI) is the linear combination of the three dimensions:
JQI = 0.241 x Economic_Dimension + 0.602 x Professional_Dimension + 0.158 x
Work-lifeBalance_Dimension.
This choice implies that a compensation among dimensions is admitted: the same
JQI value can be derived from different linear combinations.
The indicator has been validated in order to test its validity and reliability. Validity
has been tested by three regression models, where the three dimensions of the JQI are
the response variables, and the motivations of a desired work change the explanatory
ones. Three motivation of leaving are available: economic/contractual, activity and
inadequate use of competences, distance from home and work environment. The first
motivation should be the best predictor of the economic dimension, the second one of
the professional dimension, and the third one of the work-life balance dimension. This
is confirmed (Table 1), even if economic/contractual motivation is a significant
predictor also of the professional dimension.
Reliability has been verified by splitting the sample in two random sub-samples of
equal size. The JQI was then calculated in the two sub-samples separately, and we
verified that both weights and the distribution of the JQI do not differ significantly
between the two samples.
Table 1: Validity of the dimensions of the JQI, tested by three regression models
Motivation for leaving
(ref: none)
Ecoomic/contractual
Activity and use of
competences
Distance from home and
work environment
Other

Economic
Est.
s.e.
-0.0520
0.0160
**
0.0289
0.0176
0.0543

0.0282

Dimension
Professional
Est.
s.e.
-0.0443
0.0126
***
0.0139
-0.1261
****
-0.0107
0.0230

0.0341
0.0270
-0.0202
0.5155
0.0072
0.6831
Intercept
****
****
p-value: * 0.05; **0.01; ***0.001; ****0.0001

0.0228
0.0056

Work-life balance
Est.
s.e.
-0.0072
0.0161
0.0044

0.0178

-0.1286
****
-0.0408
0.5693
****

0.0295
0.0292
0.0071

3 Job Quality Indicator: some possible applications

The JQI represents a powerful instruments both for descriptive and managerial
purposes.

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Giovanna Boccuzzo, Martina Gianecchini

Descriptive analyses, by jobs and individual characteristics (Table 2), offer

interesting insights about job market opportunities for people. These information may
be useful both for the individuals, in order to inform their educational and professional
choices (Which is the degree which offers the highest quality job opportunities? Is the
quality of the job correlated to a brilliant and/or a fast academic career?), and for the
education system, in order to evaluate its outcomes (Do the graduates get access to high
quality jobs? Does the level of educational attainment influence job quality?).
Table 2: Example of descriptive application: JQI and its dimensions by graduates characteristics
JQI

Economic
Est.
s.e.

Professional
Est.
s.e.

Work-life
Est.
s.e.

0.584
0.0048
0.632
0.0052
<0.0001

0.471
0.0072
0.532
0.0088
<0.0001

0.620
0.0057
0.696
0.0063
<0.0001

0.619
0.0071
0.511
0.0081
<0.0001

0.616

0.0048

0.496

0.0079

0.679

0.0057

0.542

0.0079

0.585

0.0058

0.489

0.0086

0.618

0.0071

0.598

0.0078

Est.
Gender
Female
Male
p-value
Graduation
level
Master
Undergraduate
p-value

s.e.

<0.0001

0.560

<0.0001

<0.0001

On the other hand, firms may be interested in measuring their level of job quality in
order to reduce employees turnover. As showed in Table 3, dividing respondents
between the ones who, even if employed, searched for a new job during the six months
before the interview (17.1%) and the ones who did not (82.9%), the level of job quality
is significantly different between the two groups. A further analysis shows that this
difference principally lays on the professional dimension of the JQI.
Table 3: Example of managerial application: JQI by intention to leave
%
JQI
Economic
dimension
Professional
dimension
Work-life balance
dimension

Searched a new job

17.13
Est.
s.e.
0.557
0.0100

Not searched a new job

82.87
Est.
s.e.
0.633
0.0040

p-value

p<0.0001

0.482

0.0140

0.533

0.0065

p=0.0011

0.580

0.0127

0.679

0.0050

p<0.0001

0.571

0.0156

0.581

0.0066

p=0.546

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