IDEAS home Printed from https://ideas.repec.org/p/zbw/fubsbe/200912.html

Income, happiness, and the disutility of labor

Author

Listed:
  • Knabe, Andreas
  • Rätzel, Steffen

Abstract

We reexamine the claim that the effect of income on subjective well-being suffers from a systematic downward bias if one ignores that higher income is typically associated with more work effort. We analyze this claim using German panel data, controlling for individual unobserved heterogeneity, and specifying the impact of working hours in a non-monotonic form. Our results suggest that the impact of working hours on happiness is rather small and exhibits an inverse U-shape. We do not find evidence that leaving working hours out of the analysis leads to an underestimation of the income effect.

Suggested Citation

  • Knabe, Andreas & Rätzel, Steffen, 2009. "Income, happiness, and the disutility of labor," Discussion Papers 2009/12, Free University Berlin, School of Business & Economics.
    • Handle: RePEc:zbw:fubsbe:200912
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/28101/1/608759643.PDF
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. is not listed on IDEAS
    2. Homann, Malte & Jensen, Uwe, 2013. "Does better education cause higher income?," HWWI Research Papers 145, Hamburg Institute of International Economics (HWWI).
    3. Akay, Alpaslan & Bargain, Olivier B. & Jara, H. Xavier, 2017. "Back to Bentham, Should We? Large-Scale Comparison of Experienced versus Decision Utility," GLO Discussion Paper Series 52, Global Labor Organization (GLO).
    4. Martin Schröder, 2020. "Men Lose Life Satisfaction with Fewer Hours in Employment: Mothers Do Not Profit from Longer Employment—Evidence from Eight Panels," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 152(1), pages 317-334, November.
    5. Qinglong Shao, 2022. "Exploring the promoting effect of working time reduction on life satisfaction using Germany as a case study," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 9(1), pages 1-8, December.
    6. Peter H van Der Meer & Rudi Wielers, 2011. "What makes workers happy?," Post-Print hal-00734530, HAL.
    7. Alpaslan Akay & Olivier B. Bargain & H. Xavier Jara, 2023. "Experienced versus decision utility: large‐scale comparison for income–leisure preferences," Scandinavian Journal of Economics, Wiley Blackwell, vol. 125(4), pages 823-859, October.
    8. Gerritsen, Aart, 2016. "Optimal taxation when people do not maximize well-being," Journal of Public Economics, Elsevier, vol. 144(C), pages 122-139.
    9. Wolfgang Maennig & Markus Wilhelm, 2012. "Becoming (un)employed and life satisfaction: asymmetric effects and potential omitted variable bias in empirical happiness studies," Applied Economics Letters, Taylor & Francis Journals, vol. 19(17), pages 1719-1722.
    10. Robert Rudolf, 2014. "Work Shorter, Be Happier? Longitudinal Evidence from the Korean Five-Day Working Policy," Journal of Happiness Studies, Springer, vol. 15(5), pages 1139-1163, October.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:fubsbe:200912. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/fwfubde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.