Performance Pay and Happiness: Work vs. Home?

Mehrzad B. Baktash, John S. Heywood and Uwe Jirjahn

No 2025-08, Research Papers in Economics from University of Trier, Department of Economics

Abstract: Using German survey data, we show conflicting influences of performance pay on overall life satisfaction. The overall influence reflects a strong positive influence through domains of life satisfaction associated with the job (job satisfaction, individual earnings satisfaction and household earning satisfaction) and a strong negative influence through domains away from the job (health satisfaction, sleep satisfaction and family life satisfaction). This trade-off between work and home generalizes and helps explain many previous studies examining much more specific consequences of performance pay. Finally, controlling for the mediating role of the domains, the direct influence on life satisfaction is positive for women and insignificantly different from zero for men.

Keywords: Performance Pay; Life Satisfaction; Well-Being; Satisfaction Domains; Gender (search for similar items in EconPapers)
JEL-codes: D10 J22 J33 M52 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2025
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