The Job Satisfaction-Productivity Nexus: A Study Using Matched Survey and Register Data

Posted: 12 Jun 2012

See all articles by Petri Böckerman

Petri Böckerman

Labour Institute for Economic Research

Pekka Ilmakunnas

Aalto University School of Business

Date Written: April 1, 2012

Abstract

The authors examine the role of employee job satisfaction in Finnish manufacturing plants over the period 1996–2001 to determine the extent to which it affects establishment-level productivity. Using matched data on job satisfaction from the European Community Household Panel (ECHP) and information on establishment productivity from longitudinal register data linked to the ECHP, they estimate that the effect of an increase in the establishment’s average level of employee job satisfaction on productivity is positive, but its magnitude varies depending on the specification of the model. The authors use an instrumental variables point estimate and find that an increase in the measure of job satisfaction by one within-plant standard deviation increases value-added per hours worked in manufacturing by 6.6%.

Keywords: job satisfaction, employee well-being, productivity, firm performance

JEL Classification: J28, J24

Suggested Citation

Böckerman, Petri and Ilmakunnas, Pekka, The Job Satisfaction-Productivity Nexus: A Study Using Matched Survey and Register Data (April 1, 2012). Industrial and Labor Relations Review, Vol. 65, No. 2, 2012, Available at SSRN: https://ssrn.com/abstract=2083090

Petri Böckerman (Contact Author)

Labour Institute for Economic Research

FIN-00530 Helsinki
Finland

Pekka Ilmakunnas

Aalto University School of Business ( email )

PO Box 21240
FI-00076 Aalto, Helsinki
Finland
+358 40 5815390 (Phone)

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