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When Is Happiness about How Much You Earn? The Effect of Hourly Payment on the Money-Happiness Connection

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  • DeVoe, Sanford E.

    (University of Toronto)

  • Pfeffer, Jeffrey

    (Stanford University)

Abstract

We argue that the strength of the relationship between income and happiness can be influenced by exposure to organizational practices, such as being paid by the hour, that promote an economic evaluation of time use. Using cross-sectional data from the US, two studies found that income was more strongly associated with happiness for individuals paid by the hour compared to their non-hourly counterparts. Using panel data from the United Kingdom, Study 3 replicated these results for a multi-item General Health Questionnaire measure of subjective well-being. Study 4 showed that experimentally manipulating the salience of someone's hourly wage rate caused non-hourly paid participants to evince a stronger connection between income and happiness, similar to those participants paid by the hour. Although there were highly consistent results across multiple studies employing multiple methods, overall the effect size was not large.

Suggested Citation

  • DeVoe, Sanford E. & Pfeffer, Jeffrey, 2009. "When Is Happiness about How Much You Earn? The Effect of Hourly Payment on the Money-Happiness Connection," Research Papers 2024, Stanford University, Graduate School of Business.
  • Handle: RePEc:ecl:stabus:2024
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    File URL: http://gsbapps.stanford.edu/researchpapers/library/RP2024.pdf
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    References listed on IDEAS

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    1. Alfonso Sousa-Poza & Fred Henneberger, 2002. "An Empirical Analysis of Working-Hours Constraints in Twenty-one Countries," Review of Social Economy, Taylor & Francis Journals, vol. 60(2), pages 209-242.
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    Cited by:

    1. DeVoe, Sanford E. & Pfeffer, Jeffrey, 2010. "How Higher Economic Value of Time Increases Feelings of Time Pressure," Research Papers 2066, Stanford University, Graduate School of Business.
    2. Blanchflower, David G; Oswald, Andrew, 2011. "International Happiness," CAGE Online Working Paper Series 39, Competitive Advantage in the Global Economy (CAGE).
    3. Pfeffer, Jeffrey & DeVoe, Sanford E., 2012. "The Economic Evaluation of Time Organizational Causes and Individual Consequences," Research Papers 2123, Stanford University, Graduate School of Business.

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