March 30, 2006

Job Satisfaction vs. Cold Hard Cash

How much of a pay cut would you be willing to accept to take a more satisfying job?

Via Kevin Drum, I see that UBC professors John Helliwell and Haifang Huang have tried to put a number on how much different kinds of job satisfaction are worth in cold, hard cash.  The results (cribbed from this summary at MSNBC):

  • Increased trust in your employer is worth a 36 percent pay raise.
  • A greater variety of projects is worth a 21 percent pay hike.
  • Having a position that requires skill worth 19 percent more pay.
  • Having enough time to finish your work is worth 11 percent more pay.

Based on this, then, you'd be happier overall taking a 20 percent pay cut to work at a place where you trust your employers more; but you're better off in sticking with a somewhat harried job than taking that same pay cut to work at a more measured pace.  Of course, this somewhat contradicts this earlier post on a study that found, among other things, that working on a job where there's pressure to work quickly is just about the least satisfying thing you can do with your time.

It's also worth noting that increased pay doesn't do all that much for your happiness: a pay raise of $100,000 only begins to approach the wellbeing people typically derive from a stable marriage. This suggests that a slightly slower pace of work probably only does a little bit for your wellbeing.  Still, every little bit helps.

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February 24, 2006

Measuring Wellbeing

No point summarizing here.  If you're interested in the relationship between economic growth and personal happiness (an area we've written quite a bit about), just go read this post at Angry Bear.

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The Accounting Scandal of GDP

Just in time for the release of new GDP numbers at the end of this month, Alan Durning has penned a piece on why these figures are as bogus as Enron's balance sheets--and a new program to dethrone GDP once and for all.

Read the full piece on, NEW's online news service.

Here's an excerpt:

Estimated twelve times a year by the U.S. Department of Commerce's Bureau of Economic Analysis (BEA), GDP is not a profit-and-loss statement for the nation, as many assume. It is a tally of finished goods and services. GDP math counts all spending as good, whether it's on weddings or divorces, college tuition or Botox injections, prenatal care or cyberporn.

Consequently, everyone from President Richard Nixon to Nobel Prize-winning economist Simon Kuznets (who helped devise it in the 1930s), has denounced the GDP (and its sibling, GNP) as a measure of progress. Still, the public, led on by the media, continues to treat BEA's GDP figures as society's report card -- and we've organized our national economy to get "A's." GDP announcements send waves through the nation, nudging investment decisions, changing interest rates, and making or breaking political careers.

To improve GDP accounting, the National Research Council panel, chaired by Katharine Abraham of the University of Maryland, proposed that BEA build a set of "satellite accounts" that assign a dollar value to such unpaid activities as housework, studying, and parenting. They also propose that satellite accounts subtract from GDP some of the environmental costs of production.

These outrigger accounts would put the main financial accounts into perspective as never before. For one thing, the satellite accounts would be huge. One study estimated that Australians produce goods and services in their own homes for their own consumption -- by cooking, cleaning, doing repairs and yard work -- worth nearly half as much as GDP. And housework is just one of five new accounts the Abraham panel proposes!

Read more.

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December 29, 2005

The Economist on Happiness

In the past couple of years, it's been interesting to observe a promising idea--that happiness should count as much as economic indicators--become almost mainstream. This week, for example, The Economist published a long, meandering article that examines the concepts of relative poverty and relative happiness. It compares two men--a doctor in Congo and a retired coal miner worker in Kentucky--who earn about the same amount of absolute income. The contrast proves to be a good set-up for some provocative questions:

What is the relationship between wealth and happiness? And what is the significance of relative poverty? Mr Banks makes $521 a month in a country where median male earnings are $3,400 a month. Dr Kabamba earns $600 a month in a country where most people grow their own food and hardly ever see a bank note. The two men's experiences could hardly be less similar. But which of the two would one expect to be happier?

Puzzlingly, though, the article doesn't fully explore this question. It does bring up some important factors, such as the complexities of measuring happiness across different cultures and geographies; the role of relative wealth and poverty; and the role of politics and geography (both Congo and Appalachia are known for mineral wealth and corrupt politics).

But it neglects the new wealth of research that has been released on the economics of in recent years--and one of the most consistent findings: that the correlation between financial wealth and well-being is relatively weak, especially as countries become wealthier (see this post). The US and Canada aren't doing too badly on the happiness scale, but neither are countries that have a far smaller GNP per capita.

As more large-scale studies of happiness are completed, perhaps The Economist will pay closer attention to why indicators of subjective well-being matter--not just as an interesting lifestyle comparison, but as tools that can be eventually used in public policy. For now, though, we'll have to be happy with seeing happiness make it into the news.

P.S. The article includes a discussion on the validity of the United States' poverty rate, suggesting that America overcounts the number of poor. For a healthy debate on the poverty rate as a measure, see this post.

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November 01, 2005

Your Money or Your Life? BC Chooses Life

A recent report (pdf) shows that incomes have risen more slowly in British Columbia than in the rest of Canada in the past two decades. In one article, economists offer the usual suspects of low investment in productivity-raising equipment and a shift towards the low-paying service sector. But, citing a more laid-back "West Coast lifestyle", they also suggests that some BC residents are deliberately choosing jobs that pay less in wages but more in satisfaction.

As an example, the article cites a Vancouver resident who switched to a lower paying job repairing bikes:

I enjoy what I do so I'm willing to settle for a lower wage to do something I enjoy," John said. [...] "All my friends make more money than I do," he said. "[But] a lot of my friends don't enjoy what they are doing. They do make more money but they seem to be more stressed."

So lower growth in monetary income might not actually mean BC residents are falling behind the rest of Canada. If we measured overall happiness as regularly as we measure income and GDP, perhaps BC would be ahead of the curve.

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October 06, 2005

Happiness Should Count, says NYT

As a follow-up to their story this week, the New York Times editorializes today on the importance of measuring happiness and using it to shape policy.

"A clearer understanding of what makes humans happy - not merely more eager consumers or more productive workers - might help begin to reshape those assumptions in a way that has a measurable and meliorating outcome on the lives we lead and the world we live in."

See all our posts on happiness here.

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October 04, 2005

Happiness Economics Being Taken Seriously?

According to this lengthy New York Times article, the field of happiness economics--which we've followed closely over the last year--is gaining momentum.

Countries ranging from Bhutan (which has declared that its national priority is gross national happiness, not GDP) to Britain (which released a first effort at an "index of well-being" in March) are experimenting with the concept that contentment should be measured as closely as spending. Aside from the Bhutan example, it's hard to tell how influential these efforts have been at a policy level, but the fact they're being undertaken is encouraging. (As the article underscores, though, much work still remains to be done to develop reliable and consistent indicators.)

And research continues to point out the discrepancy between subjective and economic well-being, especially as countries become wealthier. On the chart below, the US and Canada aren't doing too badly on the happiness scale, but neither are countries that have a far smaller GNP per capita.


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August 03, 2005

It's About Time

Hourglass_sm_1 Feeling overworked? Join the Take Back Your Time movement at the national conference in Seattle this week. The people at Take Back Your Time want to challenge the notion that success should be primarily measured in economic terms and bring work and life back into balance. (Good thing, because research in the growing field of happiness economics suggests that the link between money and happiness is weak.)

As it is, Americans are putting in about nine weeks more per year than our European counterparts, and more than the citizens of any other industrial country. With all the hours we put in working (and hours--or make that days--spent commuting to work), there isn’t much time for other pursuits such as connecting with friends, spending time with family, and just kicking back.

The conference examines ways to reclaim time, and supports policies such as guaranteed paid childbirth leave, three weeks vacation, and capping overtime.

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March 08, 2005

Notes from Shangri-La

Imagine a kingdom where the benevolent ruler declares that Gross National Happiness is more important than Gross National Product, and devotes more of the country’s budget to education, and environmental and cultural health, than to economic development.

There is such a country: the Himalayan kingdom of Bhutan, and the first movie ever to be filmed there, “Travellers and Magicians,” is currently showing in Seattle one week only, at the Varsity Theater (in the University District) through Thursday March 10th.

We’ve posted items about happiness and how it can be measured, and we’re encouraged that this is getting attention world-wide. Last year, Bhutan hosted the first international conference on Gross National Happiness (see conference procedings here;) the second annual conference is scheduled for June 2005 in Halifax, Nova Scotia. Time magazine offers a brief introduction to the subject:

King Wangchuck’s idea that public policy should be more closely tied to wellbeing — how people feel about their lives — is catching on. “There is a growing interest in some policymaking circles in looking at these measures,” says Richard Easterlin, economics professor at the University of Southern California.

“We have been misguided in dismissing what people say about how happy they are and simply assuming that if they are consuming more apples and buying more cars they are better off.” There are efforts to devise a new economic index that would measure wellbeing gauged by things like satisfaction with personal relationships, employment, and meaning and purpose in life, as well as, for example, the extent new drugs and technology improve standards of living.

The independent London-based think tank New Economics Foundation is pushing the implementation of a set of national wellbeing accounts that would tote up life satisfaction and personal development as well as issues such as trust and engagement. The accounts would also include liabilities, such as stress and depression.

Alternet has a good post giving some context for growing world interest in gross national happiness; Orville Schell, dean of graduate school of journalism at U.C. Berkeley, visited Bhutan in 2000, one year after the legalization of television, and wrote a thoughtful you-are-there style article about Bhutan’s past and present. A taste:

“The real appeal of Bhutan is that we feel human,” says Tshewang Dendup, a graduate of the documentary film program at the University of California, Berkeley, who now works at the Bhutan Broadcasting Service. “Maybe we are somewhat isolated from the world, but we feel part of a living community that is not just connected by wires. That’s why 95 percent of us exchange students return home. By and large, you would have to say people are happy here.”

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February 14, 2005

Sex, Lies, and Happiness

In the spirit of Valentine’s Day, we dug up our two most popular posts—well, okay, probably our two only posts, unless you count news about contraception—that mention sex.

The first is one of a stream of posts on the hot field of happiness research, which is using scientific methods to back up the common-sense maxim that money doesn’t really buy happiness (or love, or sex). Academics studying what makes people content find that it takes a lot of income to "buy" the happiness that companionship and community provide for free. For example, on average a long-lasting marriage is worth about $100,000 in annual income.

NPR picked up one piece of the story this morning. (Update: The Washington Post also ran a good, brief Q&A with Richard Layard of the London School of Economics, who's just published a book making a case for public policy that "enables people to live as happy lives as possible.")

The second post looks at a statistical puzzle related to um, sexual behavior. Is the old piece of doggerel about “men are polygamous, women monogamous” true? Or is someone in the equation lying?

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