Earnings Satisfaction in South Korea

ABSTRACT This paper explores drivers of earnings satisfaction in South Korea using Korean Labor and Income Panel Study (KLIPS) data for 2009–2023. We find that both earnings level and earnings rank are associated with higher earnings satisfaction, highlighting the importance of both absolute and relative pay. While the positive associations of earnings are stronger for men, the negative associations of work hours are stronger for women. Personal performance pay is linked to lower satisfaction for men, whereas company performance pay is linked to higher satisfaction for women. Men exhibit a midlife dip in earnings satisfaction, and marriage is associated with lower satisfaction for men but higher satisfaction for women. Self‐employment and years of tenure are linked to lower earnings satisfaction, while for women, daily employment is linked to higher satisfaction. These findings are benchmarked against job and life satisfaction, and the research and policy implications are discussed in the conclusion.