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Performance Pay and Happiness: Work vs. Home?

Author

Listed:
  • Mehrzad B. Baktash
  • John S. Heywood
  • Uwe Jirjahn

Abstract

Using German survey data, we show conflicting influences of performance pay on overall life satisfaction. The overall influence reflects a strong positive influence through domains of life satisfaction associated with the job (job satisfaction, individual earnings satisfaction and household earning satisfaction) and a strong negative influence through domains away from the job (health satisfaction, sleep satisfaction and family life satisfaction). This trade-off between work and home generalizes and helps explain many previous studies examining much more specific consequences of performance pay. Finally, controlling for the mediating role of the domains, the direct influence on life satisfaction is positive for women and insignificantly different from zero for men.

Suggested Citation

  • Mehrzad B. Baktash & John S. Heywood & Uwe Jirjahn, 2025. "Performance Pay and Happiness: Work vs. Home?," Research Papers in Economics 2025-09, University of Trier, Department of Economics.
    • Handle: RePEc:trr:wpaper:202509
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    File URL: https://www.uni-trier.de/fileadmin/fb4/prof/VWL/EWF/Research_Papers/2025-08.pdf
    File Function: First version, 2025
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    More about this item

    Keywords

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    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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