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The job satisfaction-productivity nexus: A study using matched survey and register data

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  • Böckerman, Petri
  • Ilmakunnas, Pekka

Abstract

This paper examines the role of job satisfaction in the determination of establishment-level productivity. The matched data contain both information on job satisfaction from the ECHP (European Community Household Panel) and information on establishment productivity from longitudinal register data that can be linked to the ECHP. The estimates for the effect of a one point increase in the establishment average level of employee job satisfaction, on a scale 1-6, on productivity vary depending on the specification of the model. The preferred estimate, based on the IV estimation that uses satisfaction with housing conditions as an instrument for job satisfaction, shows that the effect on value added per hours worked is ~20% in the manufacturing sector. The economic size of this effect is modest, because the observations are bunched towards the higher end of the satisfaction scale making it very difficult to increase the average level of job satisfaction in the establishment by one point.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 23348.

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Date of creation: 17 Jun 2010
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Handle: RePEc:pra:mprapa:23348

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Keywords: Job satisfaction; employee well-being; productivity; performance;

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  1. G. Steven Olley & Ariel Pakes, 1992. "The Dynamics of Productivity in the Telecommunications Equipment Industry," NBER Working Papers 3977, National Bureau of Economic Research, Inc.
  2. Daniel S. Hamermesh, 2004. "Subjective Outcomes in Economics," Southern Economic Journal, Southern Economic Association, Southern Economic Association, vol. 71(1), pages 2-11, July.
  3. 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.
  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. S Black & L Lynch, 1997. "How to Compete: The Impact of Workplace Practices and Information Technology on Productivity," CEP Discussion Papers, Centre for Economic Performance, LSE dp0376, Centre for Economic Performance, LSE.
  6. 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.
  7. Richard B. Freeman, 1977. "Job Satisfaction as an Economic Variable," NBER Working Papers 0225, National Bureau of Economic Research, Inc.
  8. Franco Peracchi, 2002. "The European Community Household Panel: A review," Empirical Economics, Springer, Springer, vol. 27(1), pages 63-90.
  9. 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.
  10. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, Econometric Society, vol. 65(3), pages 557-586, May.
  11. 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.
  12. Buhai, Sebastian & Cottini, Elena & Westergaard-Nielsen, Niels, 2008. "The impact of workplace conditions on firm performance," Working Papers, University of Aarhus, Aarhus School of Business, Department of Economics 08-13, University of Aarhus, Aarhus School of Business, Department of Economics.
  13. 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.
  14. 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.
  15. 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.
  16. repec:dgr:uvatin:2008077 is not listed on IDEAS
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Cited by:
  1. 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.
  2. Alex Bryson & Petri Böckerman & Pekka Ilmakunnas, 2011. "Does High Involvement Management Improve Worker Wellbeing?," CEP Discussion Papers, Centre for Economic Performance, LSE dp1095, Centre for Economic Performance, LSE.
  3. 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.
  4. 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.

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