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Happiness and Productivity

Andrew J. Oswald, Eugenio Proto and Daniel Sgroi
Journal of Labor Economics
Vol. 33, No. 4 (October 2015), pp. 789-822
DOI: 10.1086/681096
Stable URL: http://www.jstor.org/stable/10.1086/681096
Page Count: 34
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Abstract

Some firms say they care about the well-being and “happiness” of their employees. But are such claims hype or scientific good sense? We provide evidence, for a classic piece rate setting, that happiness makes people more productive. In three different styles of experiment, randomly selected individuals are made happier. The treated individuals have approximately 12% greater productivity. A fourth experiment studies major real-world shocks (bereavement and family illness). Lower happiness is systematically associated with lower productivity. These different forms of evidence, with complementary strengths and weaknesses, are consistent with the existence of a causal link between human well-being and human performance.

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