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

Listed author(s):
  • Petri Böckerman
  • 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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File URL: http://ilr.sagepub.com/content/65/2/244.abstract
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Article provided by 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:sae:ilrrev:v:65:y:2012:i:2:p:244-262
Contact details of provider: Web page: http://www.ilr.cornell.edu

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  1. Andrew J. Oswald & Eugenio Proto & Daniel Sgroi, 2015. "Happiness and Productivity," Journal of Labor Economics, University of Chicago Press, vol. 33(4), pages 789-822.
  2. 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.
  3. Nathalie Greenan & Jacques Mairesse, 1999. "Using Employee Level Data in a Firm Level Econometric Study," CIRANO Working Papers 99s-12, CIRANO.
  4. Sandra E. Black & Lisa M. Lynch, 2001. "How To Compete: The Impact Of Workplace Practices And Information Technology On Productivity," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 434-445, August.
  5. Freeman, Richard B, 1978. "Job Satisfaction as an Economic Variable," American Economic Review, American Economic Association, vol. 68(2), pages 135-141, May.
  6. Andrew Clark & Yannis Georgellis & Peter Sanfey, "undated". "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.
  7. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
  8. M Patterson & P Warr & M West, 2004. "Organizational Climate and Company Productivity: the Role of Employee Affect and Employee Level," CEP Discussion Papers dp0626, Centre for Economic Performance, LSE.
  9. Daniel S. Hamermesh, 2004. "Subjective Outcomes in Economics," Southern Economic Journal, Southern Economic Association, vol. 71(1), pages 2-11, July.
  10. Eero Lehto, 2007. "Regional Impact of Research and Development on Productivity," Regional Studies, Taylor & Francis Journals, vol. 41(5), pages 623-638.
  11. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
  12. Andrew E. Clark, 1996. "Job Satisfaction in Britain," British Journal of Industrial Relations, London School of Economics, vol. 34(2), pages 189-217, 06.
  13. Franco Peracchi, 2002. "The European Community Household Panel: A review," Empirical Economics, Springer, vol. 27(1), pages 63-90.
  14. 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.
  15. 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.
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