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Productivity Gains from Worker Well-Being in Europe

Author

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  • Chiara Peroni
  • Maxime Pettinger
  • Francesco Sarracino

Abstract

This article investigates the relationship between well-being in the workplace and labour productivity using a combined dataset covering the business economies of 30 European countries. The dataset combines information on working conditions and on the structure and performance of industries in manufacturing, construction and services. Data are sourced from representative surveys on individuals’ working conditions and official structural business statistics. Regressions of labour productivity on measures of worker wellbeing — job satisfaction and a multidimensional index of job quality — provide evidence that a link between the two variables operates at the aggregate level: industries where worker well-being is higher have higher levels of labour productivity. This result implies that well-being in the workplace is not just desirable in itself, but it also contributes to labour productivity. This is relevant to firms, managers, unions, and policy makers as policies that foster worker well-being consequently can contribute to productivity growth.

Suggested Citation

  • Chiara Peroni & Maxime Pettinger & Francesco Sarracino, 2022. "Productivity Gains from Worker Well-Being in Europe," International Productivity Monitor, Centre for the Study of Living Standards, vol. 43, pages 41-61, Fall.
    • Handle: RePEc:sls:ipmsls:v:43:y:2022:4
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    File URL: http://www.csls.ca/ipm/43/IPM_43_Peroni.pdf
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    References listed on IDEAS

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    1. 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.
    2. Charles Henri DiMaria & Chiara Peroni & Francesco Sarracino, 2020. "Happiness Matters: Productivity Gains from Subjective Well-Being," Journal of Happiness Studies, Springer, vol. 21(1), pages 139-160, January.
    3. Carol Corrado & Jonathan Haskel & Cecilia Jona-Lasinio & Massimiliano Iommi, 2022. "Intangible Capital and Modern Economies," Journal of Economic Perspectives, American Economic Association, vol. 36(3), pages 3-28, Summer.
    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. Edmans, Alex, 2011. "Does the stock market fully value intangibles? Employee satisfaction and equity prices," Journal of Financial Economics, Elsevier, vol. 101(3), pages 621-640, September.
    6. 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.
    7. Rafael Muñoz de Bustillo & Enrique Fernández-Macías & José-Ignacio Antón & Fernando Esteve, 2011. "Measuring More than Money," Books, Edward Elgar Publishing, number 14072.
    8. Nick Bloom & John Van Reenen, 2006. "Management Practices, Work--L ife Balance, and Productivity: A Review of Some Recent Evidence," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 22(4), pages 457-482, Winter.
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    Cited by:

    1. John F. Helliwell, 2022. "Reflections on Measuring and Improving Productivity When Subjective Well-being Is the Objective," International Productivity Monitor, Centre for the Study of Living Standards, vol. 43, pages 81-85, Fall.

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    Keywords

    Productivity; Well-Being;

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