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The job satisfaction-productivity nexus: A study using matched survey and register data

  • Böckerman, Petri
  • Ilmakunnas, Pekka

This paper examines the role of job satisfaction in the determination of establishment-level productivity. The matched data contain both information on job satisfaction from the ECHP (European Community Household Panel) and information on establishment productivity from longitudinal register data that can be linked to the ECHP. The estimates for the effect of a one point increase in the establishment average level of employee job satisfaction, on a scale 1-6, on productivity vary depending on the specification of the model. The preferred estimate, based on the IV estimation that uses satisfaction with housing conditions as an instrument for job satisfaction, shows that the effect on value added per hours worked is ~20% in the manufacturing sector. The economic size of this effect is modest, because the observations are bunched towards the higher end of the satisfaction scale making it very difficult to increase the average level of job satisfaction in the establishment by one point.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 23348.

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Date of creation: 17 Jun 2010
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Handle: RePEc:pra:mprapa:23348
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  1. Oswald, Andrew J. & Proto, Eugenio & Sgroi, Daniel, 2009. "Happiness and Productivity," IZA Discussion Papers 4645, Institute for the Study of Labor (IZA).
  2. Nathalie Greenan & Jacques Mairesse, 1999. "Using Employee Level Data in a Firm Level Econometric Study," CIRANO Working Papers 99s-12, CIRANO.
  3. John Zelenski & Steven Murphy & David Jenkins, 2008. "The Happy-Productive Worker Thesis Revisited," Journal of Happiness Studies, Springer, vol. 9(4), pages 521-537, December.
  4. Franco Peracchi, 2002. "The European Community Household Panel: A review," Empirical Economics, Springer, vol. 27(1), pages 63-90.
  5. Sandra E. Black & Lisa M. Lynch, 1997. "How to Compete: The Impact of Workplace Practices and Information Technology on Productivity," NBER Working Papers 6120, National Bureau of Economic Research, Inc.
  6. Malcolm Patterson & Peter Warr & Michael West, 2004. "Organizational climate and company productivity: the role of employee affect and employee level," LSE Research Online Documents on Economics 19977, London School of Economics and Political Science, LSE Library.
  7. 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.
  8. Andrew Clark & Yannis Georgellis & Peter Sanfey, 1997. "Job Satisfaction, Wage Changes and Quits: Evidence from Germany," Studies in Economics 9711, School of Economics, University of Kent.
  9. repec:dgr:uvatin:2008077 is not listed on IDEAS
  10. Eero Lehto, 2007. "Regional Impact of Research and Development on Productivity," Regional Studies, Taylor & Francis Journals, vol. 41(5), pages 623-638.
  11. Daniel S. Hamermesh, 2004. "Subjective Outcomes in Economics," Southern Economic Journal, Southern Economic Association, vol. 71(1), pages 2-11, July.
  12. George S Olley & Ariel Pakes, 1992. "The Dynamics Of Productivity In The Telecommunications Equipment Industry," Working Papers 92-2, Center for Economic Studies, U.S. Census Bureau.
  13. Sinikka Vanhala & Kaija Tuomi, 2006. "HRM, Company Performance and Employee Well-being," management revue. Socio-economic Studies, Rainer Hampp Verlag, vol. 17(3), pages 241-255.
  14. Freeman, Richard B, 1978. "Job Satisfaction as an Economic Variable," American Economic Review, American Economic Association, vol. 68(2), pages 135-41, May.
  15. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
  16. repec:dgr:uvatin:20080077 is not listed on IDEAS
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