Abstract
Downward occupational mobility is a generally under-explored subject in careers research. This study examines how job satisfaction evolves before, during and after a downward career transition and how the pattern is moderated by individual and contextual factors. Drawing on the UK Household Longitudinal Study which followed respondents from 40,000 households over the last decade, our fixed effects analysis shows that downward occupational mobility has negative effect on job satisfaction that lasts for several years following the transition. However, the detrimental effect of downward occupational mobility on job satisfaction is mitigated when the event is preceded by a spell of unemployment or when individuals reside in regions with high level of unemployment. These results likely reflect individuals’ tendency to evaluate their careers in the context of their employment history as well as their peers’ labour market experience. This study highlights the relativity of subjective well-being function, as self- and social comparisons feature prominently in how people judge their lives.