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Happiness and Productivity

  • Oswald, Andrew

    (University of Warwick)

  • Proto, Eugenio

    (University of Warwick)

  • Sgroi, Daniel

    (University of Warwick)

Some firms say they care about the happiness and ‘well-being’ of their employees. But are such claims hype? Or might they be scientific good sense? This study provides evidence that happiness makes people more productive. First, we examine fundamental real-world shocks (bereavement and family illness) imposed by Nature. We show that lower happiness is associated with lower productivity. Second, within the laboratory, we design two randomized controlled trials. Some individuals are deliberately made happier, while those in a control group are not. The treated individuals have 10-12% greater productivity than those in the control group. These complementary kinds of evidence, with their different strengths and weaknesses, point to a consistent pattern. They suggest that happiness raises human performance.

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Paper provided by Competitive Advantage in the Global Economy (CAGE) in its series CAGE Online Working Paper Series with number 108.

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Date of creation: 2013
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Handle: RePEc:cge:wacage:108
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Web page: http://www2.warwick.ac.uk/fac/soc/economics/research/centres/cage/

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