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Life Satisfaction of Employees, Labour Market Tightness and Matching Efficiency

Author

Listed:
  • Pablo de Pedraza

    (AIAS, University of Amsterdam and JRC European Commission)

  • Martin Guzi

    (Masaryk University, CELSI and IZA)

  • Kea Tijdens

    (AIAS, University of Amsterdam)

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. 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.

Suggested Citation

  • Pablo de Pedraza & Martin Guzi & Kea Tijdens, 2020. "Life Satisfaction of Employees, Labour Market Tightness and Matching Efficiency," MUNI ECON Working Papers 2020-02, Masaryk University, revised Feb 2023.
    • Handle: RePEc:mub:wpaper:2020-02
    DOI: 10.5817/WP_MUNI_ECON_2020-02
    Note: License: CC BY-NC-ND 4.0
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    References listed on IDEAS

    as
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    Cited by:

    1. Pablo de Pedraza & María Rosalía Vicente, 2021. "Are Spaniards Happier When the Bars Are Open? Using Life Satisfaction to Evaluate COVID-19 Non-Pharmaceutical Interventions (NPIs)," IJERPH, MDPI, vol. 18(19), pages 1-13, September.
    2. de Pedraza, Pablo & Guzi, Martin & Tijdens, Kea, 2020. "Life Dissatisfaction and Anxiety in COVID-19 pandemic," GLO Discussion Paper Series 544, Global Labor Organization (GLO).
    3. Benjamin Harrell & Luca Fumarco & Patrick Button & David J. Schwegman & Kyla Denwood, 2023. "The Impact of COVID-19 on Access to Mental Health Care Services," AEA Papers and Proceedings, American Economic Association, vol. 113, pages 420-422, May.
    4. Robson Morgan & Kelsey J. O’Connor, 2022. "Labor Market Policy and Subjective Well-Being During the Great Recession," Journal of Happiness Studies, Springer, vol. 23(2), pages 391-422, February.
    5. Jakub Prochazka & Shubham Pandey & Ondrej Castek & Mojtaba Firouzjaeiangalougah, 2024. "Replication of Changing Hearts and Minds? Why Media Messages Designed to Foster Empathy Often Fail (Gubler et al., 2022)," MUNI ECON Working Papers 2024-02, Masaryk University, revised Aug 2024.
    6. Ana Suárez Álvarez & María R. Vicente, 2023. "Going “beyond the GDP” in the digital economy: exploring the relationship between internet use and well-being in Spain," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-10, December.
    7. Luca Fumarco & Benjamin Harrell & Patrick Button & David Schwegman & E Dils, 2020. "Gender Identity, Race, and Ethnicity-based Discrimination in Access to Mental Health Care: Evidence from an Audit Correspondence Field Experiment," NBER Working Papers 28164, National Bureau of Economic Research, Inc.
    8. Tim Friedhoff & Cam-Duc Au & Philippe Krahnhof, 2023. "Analysis of the Impact of Orthogonalized Brent Oil Price Shocks on the Returns of Dependent Industries in Times of the Russian War," MUNI ECON Working Papers 2023-04, Masaryk University.

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    More about this item

    Keywords

    life satisfaction; matching efficiency; tightness; unemployment;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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