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Helliwell, J. F., Huang, H. (2009). How's the Job? Well-Being and Social Capital in the Workplace. Industrial and Labor Relation Review 63 (2), 205-227.

The authors first investigate how income and job characteristics affect life satisfaction, then estimate compensating differentials for non-financial job characteristics. To address potential problems with using life satisfaction data as dependent variables, they draw on three Canadian surveys (conducted in the years 2002–2003) with different samples and questions, and they use individual personality measures, various robustness checks, and cross-testing with measures of domain satisfaction. The life satisfaction results show strikingly large values for non-financial job characteristics, especially workplace trust. For example, a one-third-standard-deviation increase in trust in management is equivalent to an income increase of more than one-third. These results, if confirmed by further research in other settings, suggest either that it is very costly to build and maintain workplace trust or that there are opportunities to improve workplace environments so as to increase both life satisfaction and workplace efficiency. The life satisfaction results show strikingly large values for non-financial job characteristics, especially for workplace trust, which we treat as a primary measure of the quality of workplace social capital. For example, an increase of trust in management that covers one tenth of the survey respondents is equivalent to an income increase of more than one-third. If these results should be confirmed in further work, and other countries, they would suggest either that it is very costly to build and maintain workplace trust or that there are opportunities to improve workplace environments so as to increase both life satisfaction and workplace efficiency.

Authors

Helliwell, John F.

John F. Helliwell is Arthur J.E. Child Foundation Fellow of the Canadian Institute for Advanced Research and co-director (with George Akerlof) of CIFAR's program on "Social Interactions, Identity and Well-Being". He is also Professor Emeritus of Economics at the University of British...

Huang, Haifang

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