Life Satisfaction of Employees, Labour Market Tightness and Matching Efficiency

Pablo de Pedraza (), Martin Guzi () and Kea Tijdens
Additional contact information
Pablo de Pedraza: European Commission, DG Joint Research Centre

No 12961, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Di Tella et al. (2001) show that temporary fluctuations in life satisfaction (LS) are correlated with macroeconomic circumstances such as gross domestic product, unemployment, and inflation. In this paper, we bring attention to labour market measures from search and matching models (Pissarides 2000). Our analysis follows the two-stage estimation strategy used in Di Tella et al. (2001) to explore sectoral unemployment levels, labour market tightness, and matching efficiency as LS determinants. In the first stage, we use a large sample of individual data collected from a continuous web survey during the 2007-2014 period in the Netherlands to obtain regression-adjusted measures of LS by quarter and economic sector. In the second-stage, we regress LS measures against the unemployment level, labour market tightness, and matching efficiency. Our results are threefold. First, the negative link between unemployment and an employee's LS is confirmed at the sectoral level. Second, labour market tightness, measured as the number of vacancies per job-seeker rather than the number of vacancies per unemployed, is shown to be relevant to the LS of workers. Third, labour market matching efficiency affects the LS of workers differently when they are less satisfied with their job and in temporary employment. No evidence of this relationship has been documented before Our results give support to government interventions aimed at activating demand for labour, improving the matching of job-seekers to vacant jobs, and reducing information frictions by supporting match-making technologies.

Keywords: tightness; matching efficiency; life satisfaction; unemployment (search for similar items in EconPapers)
JEL-codes: E24 J21 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2020-02
New Economics Papers: this item is included in nep-hap, nep-lma and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Published - published in: International Journal of Manpower , 2020, 42 (3), 341-355

Downloads: (external link)
https://docs.iza.org/dp12961.pdf (application/pdf)

Related works:
Working Paper: Life Satisfaction of Employees, Labour Market Tightness and Matching Efficiency (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp12961

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().