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Happiness and Productivity

53 Pages Posted: 22 Dec 2009  

Andrew J. Oswald

University of Warwick - Department of Economics; IZA Institute of Labor Economics

Eugenio Proto

University of Warwick - Department of Economics; IZA Institute of Labor Economics

Daniel Sgroi

University of Warwick - Department of Economics

Abstract

The paper provides evidence that happiness raises productivity. In Experiment 1, a randomized trial is designed. Some subjects have their happiness levels increased, while those in a control group do not. Treated subjects have 12% greater productivity in a paid piece-rate Niederle-Vesterlund task. They alter output but not the per-piece quality of their work. To check the robustness and lasting nature of this kind of effect, a complementary Experiment 2 is designed. In this, major real-world unhappiness shocks - bereavement and family illness - are studied. The findings from (real-life) Experiment 2 match those from (random-assignment) Experiment 1.

Keywords: labor productivity, emotions, well-being, happiness, positive affect, experimental economics

JEL Classification: D03, J24, C91

Suggested Citation

Oswald, Andrew J. and Proto, Eugenio and Sgroi, Daniel, Happiness and Productivity. IZA Discussion Paper No. 4645. Available at SSRN: https://ssrn.com/abstract=1526075

Andrew J. Oswald (Contact Author)

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom
523510 (Phone)

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

Eugenio Proto

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Daniel Sgroi

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom

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