Sometimes, the gloom extends well beyond the typical Monday melancholy at work. Research conducted at the University of Georgia has indicated that job dissatisfaction can persist throughout the week. This observation suggests that employers and policymakers need to consider the significant economic implications of employee happiness. Susana Ferreira, a UGA College of Agricultural and Environmental Sciences professor, employed an empirical model to explore the connections between job satisfaction, wages, and working environments. The conventional expectation is that employees are compensated fairly according to their working conditions, a concept rooted in the hedonic wage model. This optimistic assumption presupposes ideal job and labour market conditions, with workers being rational, well-informed about their work conditions, and free to switch jobs easily.

However, the study led by Ferreira takes a different approach by focusing on overall satisfaction to gain a deeper understanding of the employees and to investigate the compromises between working conditions and pay. This focus is particularly relevant in rigid job markets where workers might feel trapped. Ferreira, the study’s lead author, observed that employees who are inadequately compensated for their job risks might seek other employment opportunities. Conversely, they might tolerate lower wages if their working conditions are excellent. Despite these possibilities, the least desirable jobs are often the least well-paid, especially in inflexible job markets.

The research involved analysing data from nearly 35,000 European workers across various sectors in 30 countries. Ferreira discovered a consistent pattern: workers facing higher risks generally received lower wages than expected. Yet, the job satisfaction indicators remained effective. Workers with lower wages or those confronting higher risks and worse conditions typically reported greater dissatisfaction with their jobs.

The study also quantified the costs associated with enduring such conditions. Adjusted for U.S. dollars at the time of publication, it was found that workers would need to be compensated approximately $29 per hour to offset all perceived health and safety risks to remain satisfied with their positions. Moreover, avoiding days off due to work-related accidents was estimated to cost $362 annually, while improved workplace conditions were valued at over $12,000 annually.

“If you understand job satisfaction, you can estimate how much more you need to pay your workers to accept higher risks,” explained Ferreira. This statement highlights the crucial role of job satisfaction in the economic valuation of work conditions. The study demonstrates that higher wages and safer work environments can significantly improve worker contentment, leading to numerous benefits for the business.

Ferreira emphasised the importance of recognising workers’ emotions in her conclusions. “Paying attention to how people feel is crucial,” she remarked. Economists can access valuable, overlooked economic information by asking workers about their feelings and collecting data on subjective well-being. Acknowledging employee well-being can foster a more productive work environment, enhance individual performance, and provide broad economic benefits. Ferreira believes this study could pave the way for better methods of estimating and measuring environmental benefits and contributions to welfare in a way that informs policy decisions.

More information: Susana Ferreira et al, Measuring job risks when hedonic wage models do not do the job, Journal of Environmental Economics and Management. DOI: 10.1016/j.jeem.2025.103120

Journal information: Journal of Environmental Economics and Management Provided by University of Georgia