A new paper from the NBER puts a price on job satisfaction - and it's huge. Small rises in job satisfaction gives us as much happiness as a big rise in our income. In a study of Canadian workers John Helliwell and Haifang Huang say:
To reduce job satisfaction from 9 to 8 on the 10-point scale...would, for a family with $65,000 income, have to be matched by an income increase of more than $30,000 a year [to leave life satisfaction unchanged]...Moving from the middle to the 75% percentile in job satisfaction would have a personal income equivalence, for someone of median income, of $17,000 per annum. These dollar amounts would be correspondingly lower for families with lower incomes.
What apsect of job satifaction is most valuable? It's not autonomy, in the sense of being able to make lots of decisions on one's own. Controlling for other things, this is negatively correlated with happiness. Responsibility, it seems, is a burden.
Instead, it's task variety, skill intensity and having enough time to do the job that makes us happy.
What's really important, though, is working somewhere where workers trust bosses. A one standard deviation increase in the trustworthiness of bosses (2.5 points on a scale of 1-10) has an income equivalent of $32,500 at a family income of $65,000. Helliwell and Huang say:
The estimated life satisfaction effects of workplace trust are so large as to suggest there are large unexploited gains available for trust-building activities by managers, shareholders and employees.
All this, of course, corroborates my Bayesian prior - that there's a strong case for breaking down mamagerialist hierarchies.
There is, though, a caveat here. One reason why it requires huge rises in income to compensate us for falls in job satisfaction is that our happiness doesn't rise much with incomes.
Indeed, it is relative income, more so than absolute income, that makes us happy. Helliwell and Huang have found that, controlling for own income, happiness is higher where neighbourhood incomes are lower.
As the disappointed worker in the old joke asked his boss: "if you can't give me a pay rise, can't you at least give everyone else a cut?"