Scandinavian Working Papers in Economics

SSE/EFI Working Paper Series in Economics and Finance,
Stockholm School of Economics

No 687: DOES JOB SATISFACTION IMPROVE THE HEALTH OF WORKERS? NEW EVIDENCE USING PANEL DATA AND OBJECTIVE MEASURES OF HEALTH

Justina AV Fischer () and Alfonso Sousa-Poza ()
Additional contact information
Justina AV Fischer: Dept. of Economic Statistics, Stockholm School of Economics, Postal: Stockholm School of Economics, Sveavaegen 65, P.O. Box 6501, SE-113 83 Stockholm, Sweden
Alfonso Sousa-Poza: University of Stuttgart-Hohenheim, Postal: University of Stuttgart-Hohenheim, , Haushalts- und Konsumökonomik sowie Genderökonomik (530a), , Fruwirthstr. 48, , D-70599 Stuttgart, , Germany

Abstract: This paper evaluates the relationship between job satisfaction and measures of health of workers using the German Socio-Economic Panel (GSOEP). Methodologically, it addresses two important design problems encountered frequently in the literature: (a) cross-sectional causality problems and (b) absence of objective measures of physical health that complement self-reported measures of health status. Not only does using the panel structure with individual fixed effects mitigate the bias from omitting unobservable personal psycho-social characteristics, but employing more objective health measures such as health-system contacts and disability addresses such measurement problems relating to self-report assessments of health status.

We find a positive link between job satisfaction (and changes over time therein) and subjective health measures (and changes therein); that is, employees with higher or improved job satisfaction levels feel healthier and are more satisfied with their health. This observation also holds true for more objective measures of health. Particularly, improvements in job satisfaction over time appear to prevent workers from (further) health deterioration.

Keywords: job satisfaction; well-being; health; panel data analysis

JEL-codes: I18; I19; J28

37 pages, September 28, 2007

Note: forthcoming in 'Health Economics'

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