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

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  • Petri Böckerman
  • 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%.

Suggested Citation

  • Petri Böckerman & Pekka Ilmakunnas, 2012. "The Job Satisfaction-Productivity Nexus: A Study Using Matched Survey and Register Data," ILR Review, Cornell University, ILR School, vol. 65(2), pages 244-262, April.
  • Handle: RePEc:sae:ilrrev:v:65:y:2012:i:2:p:244-262
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    1. 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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    More about this item

    JEL classification:

    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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