A new study has revealed that lasting increases in income improve well-being, but extra work makes people more dissatisfied.
According to findings carried out by researchers at the University of Bonn, more money made people happier but only if there was a long-term increase in income. A temporary increase did not have any noticeable effect on an employee’s level of happiness, even if it was a large increase.
They identified a second important way in which professional life influences personal happiness: the number of hours that employees work.
Researcher Christian Bayer said that those who consistently had to work more become less happy, adding that this finding contradicted many other studies that conclude people were more satisfied when they had any job than none at all.
Bayer’s study suggested that the unemployed suffered from the lack of income not the lack of employment per se.
In the study, researchers developed a new approach to analyse the link of income to personal levels of happiness. Bayer included the dynamics of changing income levels as it was a key step towards a better understanding of how income level and working hours affect well-being.
They found that long-term income increases had a completely different effect on an employee’s satisfaction than temporary raise does.
The study proved that a functioning financial market was important for balancing out the effects of income fluctuations and extra work on a person’s well-being.
Bayer said that their findings showed that wages and working hours had more to do with a worker’s happiness and unhappiness than was previously assumed, concluding that the formula for greater satisfaction in life seemed to be: persistently more money while working the same number of hours.
The study is published in the Journal American Economic Journal: Applied Economics.