What makes workers happy?

Abstract

This article answers the question what makes workers happy? It does so by combining insights from micro-economics, sociology and psychology. Basis is the standard utility function of a worker that includes income and hours of work and is elaborated with job characteristics. In this way it is possible to answer whether part-time workers are happier than full-time workers. The utility function is estimated on basis of the European Social Survey 2004 which contains all necessary information. The results show that workers optimize income and hours of work as predicted by micro-economics, but also that part-time workers are happier than full-time workers. Challenging work with a high level of autonomy makes the workers happy, work pressure makes workers unhappy. Higher educated workers are unhappier than lower educated workers, we find a negative effect of education, but this is compensated by the type of jobs these higher educated hold.

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