Moving to Productivity: The Benefits of Healthy Buildings

19 Pages Posted: 9 Nov 2020

See all articles by Juan Palacios

Juan Palacios

Massachusetts Institute of Technology (MIT) - Center for Real Estate; IZA Institute of Labor Economics

Piet Eichholtz

Maastricht University

Nils Kok

University of Maastricht - Limburg Institute of Financial Economics (LIFE)

Date Written: August 6, 2020

Abstract

Health is a critical factor for the generation of value by workers. Companies bear substantial costs associated with absenteeism and presenteeism among their employees. This study investigates the impact of the environmental conditions in the workplace on the health and job satisfaction of employees, as core factors of productivity. We provide evidence based on a natural experiment, in which 70% of the workforce of a municipality in the Netherlands was relocated to a building with a design focused on sustainability and health and well-being. We construct a longitudinal dataset based on individual surveys of the entire municipality workforce and include measures before and after the move. The estimation results show a significant improvement in the perceived environmental conditions, as well as in the health and well-being of the relocated workers, measured by the drop in incidence of sick building syndrome symptoms. Results are heterogeneous based on age: older groups of employees enjoy larger health impacts. The relocation effects remain persistent in the medium term (two years after the moving date). Importantly, a mediation analysis suggests that the achieved improvements in health and well-being lead to significantly enhanced job satisfaction and a 2% reduction in the prevalence of sick leave.

Keywords: Healthy Buildings, Worker Performance, Sustainability, Real Estate, IEQ

JEL Classification: I10, I12, Q5, R3

Suggested Citation

Palacios, Juan and Eichholtz, Piet and Kok, Nils, Moving to Productivity: The Benefits of Healthy Buildings (August 6, 2020). MIT Center for Real Estate Research Paper No. 4, Available at SSRN: https://ssrn.com/abstract=3710946 or http://dx.doi.org/10.2139/ssrn.3710946

Juan Palacios (Contact Author)

Massachusetts Institute of Technology (MIT) - Center for Real Estate ( email )

United States

IZA Institute of Labor Economics ( email )

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

Piet Eichholtz

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands

Nils Kok

University of Maastricht - Limburg Institute of Financial Economics (LIFE) ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands

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