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Job satisfaction as a determinant of employees’ optimal well-being in an instrumental variable approach

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  • Emiliano Sironi

    (Catholic University)

Abstract

The correlation between measures of a high level of job satisfaction and well-being is well documented in the literature; however, such a relationship may be potentially bidirectional. If an increase in job satisfaction affects optimal well-being, the reverse relationship can also be hypothesized. In addition, the relationship between job satisfaction and well-being may be polluted by the presence of omitted variables that can be correlated both with the satisfaction in the workplace and with a measure of optimal wellbeing. Using the sixth round of the European Social Survey, this paper utilizes an instrumental variable approach to isolate the effect of job satisfaction on optimal well-being variation that is independent of unobserved individual characteristics. After having controlled for the role of socio-economic profiles of interviewed individuals, our findings confirm a strong and significantly positive influence of job satisfaction on optimal well-being. The novelty of our analysis is twofold: firstly, we employ an instrumental variable approach to correct for endogeneity that might the effect of job satisfaction on well-being. Secondly, we use an innovative measure of optimal well-being, which we adopt as an outcome variable for measuring a multi-dimensional definition of well-being dealing with both hedonic and eudemonic streams.

Suggested Citation

  • Emiliano Sironi, 2019. "Job satisfaction as a determinant of employees’ optimal well-being in an instrumental variable approach," Quality & Quantity: International Journal of Methodology, Springer, vol. 53(4), pages 1721-1742, July.
  • Handle: RePEc:spr:qualqt:v:53:y:2019:i:4:d:10.1007_s11135-019-00835-3
    DOI: 10.1007/s11135-019-00835-3
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