Happiness is typically defined by how people experience and evaluate their lives as a whole. Since most of us spend a large proportion of our lives at work, it is inevitable that our experiences and feelings there have a strong influence on our levels of happiness.  

In the most recent World Happiness Report — published annually to coincide with the United Nation’s International Day of Happiness — I worked with co-author George Ward (Institute for Work and Employment Research, Massachusetts Institute of Technology & Centre for Economic Performance, London School of Economics) to contribute a chapter that delved more deeply into the relationship between work and happiness.

We draw largely upon the Gallup World Poll, which has been surveying people in over 150 countries around the world since 2006. This meant that we could analyse data from hundreds of thousands of individuals across the globe and investigate the ways in which different aspects of people’s working lives drive their wellbeing.

‘Subjective wellbeing’ – loosely referred to as happiness – is measured in two ways. First, we look at ‘life satisfaction’: how people think about the quality of their lives overall. This is measured by Gallup according to something known as the Cantril Ladder. Gallup asks respondents to imagine an 11-step ladder in which the top step is their best possible life and the bottom step is their worst possible life; they are then asked which step they think they’re currently on.

Life satisfaction alone does not constitute wellbeing though. Gallup also investigates the extent to which people experience positive and negative affective states such as enjoyment, stress, and worry in their day-to-day lives. And in our chapter on work and happiness, we analysed these responses in conjunction with traditional workplace measures such as job satisfaction and employee engagement.

Having a job is important

The overwhelming importance of having a job for happiness is evident throughout the analysis, and holds across all of the world’s regions. Overall, employed people evaluated the quality of their lives around 0.6 points higher on average than the unemployed on a scale from 0 to 10. And unemployed people reported that they experienced around 30 percent more negative emotions in their daily lives as well as fewer positive ones.

It’s not just about the money, although people with jobs rated their overall life satisfaction much more highly than people without jobs. As we explain later, it’s about social status, social relations, daily structure, and working towards goals.

But some jobs are happier than others

Certain broad types of jobs are associated with higher and lower levels of individual happiness, even taking into account variables such as income and education.

Blue-collar labour is systematically correlated with lower levels of happiness, and this is true of all labour-intensive industries such as construction, mining, manufacturing, transport, farming, fishing, and forestry.

Senior professionals (manager, executive, official), on the other hand, evaluate their lives higher and report more positive affective experiences. The self-reported happiness of office workers (clerical, sales, or service) is significantly lower than that of their senior colleagues, even controlling for income and other covariates.

Interestingly, we find that being self-employed is associated with higher overall life evaluation in most developed nations, but that self-employment is also associated with the heightened experience of negative emotions such as stress and worry.

What makes a good job?

As you might expect, people in well-paying jobs are happier and more satisfied with their lives and jobs than those in the lower income brackets. However, it is not the case that the more money you have the happier you are. Our findings suggest that there are diminishing returns to higher income: an extra $100 of salary is worth much more to someone at the lower end of the income distribution than someone already earning a larger amount.

Beyond income, work-life balance is perhaps the strongest workplace driver of an individual’s subjective wellbeing. This turns out to be true across the board, in terms of people’s life and job satisfaction, general happiness, and moment-to-moment emotional experiences.

Those who have a job that leaves them too tired to enjoy the non-work elements of their lives report levels of positive affect in their day-to-day lives that are substantially lower than those who do not. Furthermore, workers who report that their job interferes with their ability to spend time with their partner and family, as well as those who ‘bring their job home’ with them by worrying about work matters even when they are not at work, report systematically lower levels of subjective wellbeing across all four measures

The content of the job is important. Those with jobs that entail high levels of variety and the need to learn new things are more satisfied with their lives and their jobs and experience more positive emotions day-to-day. Further, individual autonomy in the workplace is a significant driver of happiness: having control over how the work day is organised as well as the pace at which the employee works is positively correlated with higher wellbeing outcomes. Conversely, those with jobs that involve risks to their health and safety generally score worse on the measures of subjective wellbeing captured in this survey.

Social capital in the workplace is even more important. The level of support that a worker receives from his or her fellow workers is very strongly predictive of all four measures of subjective wellbeing in the sample, as is being able to have a say in policy decisions made by the organisation for which the employee works.

Job security is also a robust driver of individual wellbeing. Those who feel their livelihood is at risk systematically report lower levels of subjective wellbeing than those who report having high levels of perceived job security. Connected to this is the notion of being able to ‘get on in life’: those who feel they have a job that has good opportunities for advancement and promotion – even controlling for their current level of remuneration and the current content of their job – feel more satisfied with their jobs and lives and also tend to experience more positive affective states.

Finally, bosses have been shown to be important. Recent work has demonstrated that bosses and supervisors can play a substantial role in determining subjective wellbeing. In particular, the competence of bosses has been shown to be a strong predictor of job satisfaction, even controlling for individual fixed effects in a longitudinal analysis that follows people who stay in the same job as their boss gains (or loses) competence over time.

Questions to ponder

Are stratospheric salaries the only way to retain top talent?

If your best people are already well paid, offering them ever-higher salaries is unlikely to make them correspondingly loyal. What is most important to them and what can you offer, beyond money, that will make them want to stay?

Is the gig economy really the path to happiness and productivity?

The growing trend towards using ‘self-employed’ or ‘freelance’ workers in low-level jobs such as couriers is often justified by arguing that self-employed workers have control over when they work and are thus able to achieve the work-life balance that they want.

While this may hold true for a minority of people in specific circumstances (such as students or predominantly stay-at-home parents seeking a supplementary income), employers should recognise that income and job security are also drivers of subjective wellbeing, as well as a sense of autonomy in the workplace.

What are the trade-offs between pay, security, and flexibility that can or should be made to ensure greater happiness on the part of workers, and thus greater productivity for the employers?

How can you restructure existing jobs and practices to create engagement?

Even where people reported general levels of job satisfaction, levels of engagement were very low across the world. In fact, paid work is ranked lower than any of the other 39 activities individuals can report engaging in, with the exception of being sick in bed.

The differences can be attributable to the fact that the concepts of job satisfaction and engagement are measuring different aspects of happiness at work. Satisfaction can perhaps be reduced to feeling content with one’s job; the notion of (active) employee engagement requires individuals to be positively absorbed by their work and fully committed to advancing the organisation’s interests. Understandably, this is what employers want – but it’s a much more difficult hurdle to clear.

Interestingly, the data shows clearly that business owners report being much more actively engaged at work as compared to all other job types. Does this suggest that the partnership model, or something that feels like partnership, could be the way forward?

Should there be other measures of manager competence?

If incompetent managers are indeed contributing to making people unhappy at work, how can they be identified and either improved or removed? Unfortunately, the standard means of measuring employee satisfaction – the staff survey – is more or less uniformly incapable of generating a clear picture of individual managers’ competence. Even though these surveys are presented as anonymous, few staff tend to risk completing them nearly as fully and frankly as they would like.

Jan-Emmanuel De Neve

Source: Saïd Business School, Dr De Neve is Associate Professor of Economics and Strategy at Saïd Business School and a Fellow of Harris Manchester College.