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

  • Petri B?ckerman
  • Pekka Ilmakunnas

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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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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  1. S. Black & L. Lynch, 1997. "How to compete: the impact of workplace practices and information technology on productivity," LSE Research Online Documents on Economics 20298, London School of Economics and Political Science, LSE Library.
  2. 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.
  3. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
  4. Oswald, Andrew J. & Proto, Eugenio & Sgroi, Daniel, 2008. "Happiness and Productivity," The Warwick Economics Research Paper Series (TWERPS) 882, University of Warwick, Department of Economics.
  5. Andrew Clark & Yannis Georgellis & Peter Sanfey, . "Job Satisfaction, Wage changes and Quits: Evidence from Germany," Economics and Finance Discussion Papers 98-06, Economics and Finance Section, School of Social Sciences, Brunel University.
  6. 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 19977, London School of Economics and Political Science, LSE Library.
  7. Daniel S. Hamermesh, 2004. "Subjective Outcomes in Economics," Southern Economic Journal, Southern Economic Association, vol. 71(1), pages 2-11, July.
  8. Freeman, Richard B, 1978. "Job Satisfaction as an Economic Variable," American Economic Review, American Economic Association, vol. 68(2), pages 135-41, May.
  9. Nathalie Greenan & Jacques Mairesse, 1999. "Using Employee Level Data in a Firm Level Econometric Study," CIRANO Working Papers 99s-12, CIRANO.
  10. Franco Peracchi, 2002. "The European Community Household Panel: A review," Empirical Economics, Springer, vol. 27(1), pages 63-90.
  11. repec:dgr:uvatin:2008077 is not listed on IDEAS
  12. John Zelenski & Steven Murphy & David Jenkins, 2008. "The Happy-Productive Worker Thesis Revisited," Journal of Happiness Studies, Springer, vol. 9(4), pages 521-537, December.
  13. Eero Lehto, 2007. "Regional Impact of Research and Development on Productivity," Regional Studies, Taylor & Francis Journals, vol. 41(5), pages 623-638.
  14. Sinikka Vanhala & Kaija Tuomi, 2006. "HRM, Company Performance and Employee Well-being," management revue. Socio-economic Studies, Rainer Hampp Verlag, vol. 17(3), pages 241-255.
  15. Buhai, Sebastian & Cottini, Elena & Westergaard-Nielsen, Niels, 2008. "The impact of workplace conditions on firm performance," Working Papers 08-13, University of Aarhus, Aarhus School of Business, Department of Economics.
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