How's the Job? Well-Being and Social Capital in the Workplace

John F. Heliwell and Haifang Huang ()
Authors registered in the RePEc Author Service: John F. Helliwell

No 11759, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper takes a different tack in addressing one of the fundamental questions in economics: what are the factors that determine the distribution of jobs and wages? In Adam Smith's classic formulation, and in much of the subsequent literature, wage levels have been used to estimate the values of job characteristics ("compensating" or "equalizing" differentials). There are econometric problems with this approach, principally caused by unmeasured differences in talents and aptitudes that enable people of high ability to have jobs with both high wages and good working conditions, thus understating the value of working conditions. We bypass this difficulty by estimating the extent to which incomes and job characteristics influence direct measures of life satisfaction from three large and recent Canadian surveys. The well-being results show strikingly large values for non-financial job characteristics, especially workplace trust and other measures of the quality of workplace social capital. The compensating differentials estimated for the quality of workplace social capital are so large as to suggest that they do not reflect a full equilibrium. Thus the current situation probably reflects the existence of unrecognized opportunities for managers and employees to alter workplace environments, or for workers to change jobs, so as to increase both life satisfaction and workplace efficiency.

JEL-codes: I31 J31 Z13 (search for similar items in EconPapers)
Date: 2005-11
New Economics Papers: this item is included in nep-lab and nep-soc
Note: LS
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (30)

Published as John F. Helliwell & Haifang Huang, 2010. "How’s the Job? Well-Being and Social Capital in the Workplace," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 63(2), pages 205-227, January.

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