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The Job Satisfaction-Productivity Nexus: A Study Using Matched Survey and Register Data

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  • Petri B?ckerman
  • Pekka Ilmakunnas

Abstract

The authors examine the role of employee job satisfaction in Finnish manufacturing plants over the period 1996?2001 to determine the extent to which it affects establishment-level productivity. Using matched data on job satisfaction from the European Community Household Panel (ECHP) and information on establishment productivity from longitudinal register data linked to the ECHP, they estimate that the effect of an increase in the establishment's average level of employee job satisfaction on productivity is positive, but its magnitude varies depending on the specification of the model. The authors use an instrumental variables point estimate and find that an increase in the measure of job satisfaction by one within-plant standard deviation increases value-added per hours worked in manufacturing by 6.6%.

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Bibliographic Info

Article provided by ILR Review, Cornell University, ILR School in its journal ILR Review.

Volume (Year): 65 (2012)
Issue (Month): 2 (April)
Pages: 244-262

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Handle: RePEc:ilr:articl:v:65:y:2012:i:2:p:244-262

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References

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  1. Lisa M Lynch & Sandra E Black, 2002. "How to Compete: The Impact of Workplace Practices and Information Technology on Productivity," Working Papers, Center for Economic Studies, U.S. Census Bureau 02-04, Center for Economic Studies, U.S. Census Bureau.
  2. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, Econometric Society, vol. 65(3), pages 557-586, May.
  3. Oswald, Andrew J. & Proto, Eugenio & Sgroi, Daniel, 2008. "Happiness and Productivity," The Warwick Economics Research Paper Series (TWERPS), University of Warwick, Department of Economics 882, University of Warwick, Department of Economics.
  4. Eero Lehto, 2007. "Regional Impact of Research and Development on Productivity," Regional Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 41(5), pages 623-638.
  5. Andrew Clark & Yannis Georgellis & Peter Sanfey, 1997. "Job Satisfaction, Wage Changes and Quits: Evidence from Germany," Studies in Economics, Department of Economics, University of Kent 9711, Department of Economics, University of Kent.
  6. Jacques Mairesse & Nathalie Greenan, 1999. "Using Employee Level Data in a Firm Level Econometric Study," NBER Working Papers 7028, National Bureau of Economic Research, Inc.
  7. Richard B. Freeman, 1977. "Job Satisfaction as an Economic Variable," NBER Working Papers 0225, National Bureau of Economic Research, Inc.
  8. Sebastian Buhai & Elena Cottini & Niels Westerg�rd-Nielsen, 2008. "The Impact of Workplace Conditions on Firm Performance," Tinbergen Institute Discussion Papers 08-077/3, Tinbergen Institute.
  9. Daniel S. Hamermesh, 2004. "Subjective Outcomes in Economics," Southern Economic Journal, Southern Economic Association, vol. 71(1), pages 2-11, July.
  10. John Zelenski & Steven Murphy & David Jenkins, 2008. "The Happy-Productive Worker Thesis Revisited," Journal of Happiness Studies, Springer, Springer, vol. 9(4), pages 521-537, December.
  11. Sinikka Vanhala & Kaija Tuomi, 2006. "HRM, Company Performance and Employee Well-being," management revue. Socio-economic Studies, Rainer Hampp Verlag, Rainer Hampp Verlag, vol. 17(3), pages 241-255.
  12. M Patterson & P Warr & M West, 2004. "Organizational Climate and Company Productivity: the Role of Employee Affect and Employee Level," CEP Discussion Papers, Centre for Economic Performance, LSE dp0626, Centre for Economic Performance, LSE.
  13. Franco Peracchi, 2002. "The European Community Household Panel: A review," Empirical Economics, Springer, Springer, vol. 27(1), pages 63-90.
  14. George S Olley & Ariel Pakes, 1992. "The Dynamics Of Productivity In The Telecommunications Equipment Industry," Working Papers, Center for Economic Studies, U.S. Census Bureau 92-2, Center for Economic Studies, U.S. Census Bureau.
  15. Malcolm Patterson & Peter Warr & Michael West, 2004. "Organizational climate and company productivity: the role of employee affect and employee level," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 19977, London School of Economics and Political Science, LSE Library.
  16. repec:dgr:uvatin:2008077 is not listed on IDEAS
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Cited by:
  1. Jan-Emmanuel De Neve & Ed Diener & Louis Tay & Cody Xuereb, 2013. "The objective benefits of subjective well-being," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 51669, London School of Economics and Political Science, LSE Library.
  2. Tumen, Semih & Zeydanli, Tugba, 2014. "Is Happiness Contagious? Separating Spillover Externalities from the Group-Level Social Context," MPRA Paper 53184, University Library of Munich, Germany.
  3. Böckerman, Petri & Bryson, Alex & Ilmakunnas, Pekka, 2011. "Does high involvement management improve worker wellbeing?," MPRA Paper 33847, University Library of Munich, Germany.
  4. Jan-Emmanuel De Neve & Ed Diener & Louis Tay & Cody Xuereb, 2013. "The Objective Benefits of Subjective Well-Being," CEP Discussion Papers, Centre for Economic Performance, LSE dp1236, Centre for Economic Performance, LSE.

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