The relationship between the institutional environment and job satisfaction: a multilevel approach

An extensive body of literature has explored the key determinants of employee job satisfaction placing particular emphasis on individual differences and job characteristics. However, variations in job satisfaction levels persist across countries, highlighting the importance of contextual and institutional factors across different national contexts. This study investigates the role of formal and informal institutions in shaping job satisfaction. Based on a sample of 10.822 employees from 26 European countries, the study employs a multilevel methodology to test the proposed hypotheses. The findings demonstrate that national institutions significantly contribute to cross-country differences in job satisfaction. In particular, the positive impact of labour freedom on job satisfaction is more pronounced in countries characterised by low power distance, low uncertainty avoidance, and high individualism. Conversely, in countries with high power distance, high uncertainty avoidance, and low individualism, the relationship between labour freedom and job satisfaction is weaker. These results emphasise the critical role of cultural and institutional contexts.