Does Job Satisfaction Improve Health? New Evidence using Panel Data and Objective Measures of Health

Abstract

This paper evaluates the relationship between job satisfaction and measures of health using the Swiss Household Panel (SHP) and cross-sectional data from the Survey on Health, Ageing and Retirement in Europe (SHARE). Methodologically, it addresses two important design problems frequently encountered in the literature: (a) cross-sectional causality problems and (b) unobserved negative affectivity in self-report measures of health status. In this study, however, using the SHP panel structure with job satisfaction lagged eliminates the simultaneity bias, while employing the objective health measures in the SHARE dataset addresses the negative affectivity issue. For all datasets, a positive link is found between job satisfaction and self-report health measures: employees with higher job satisfaction levels are less depressed and feel less impeded in their daily activities. However, when objective measures of physical health are used, no such positive link is observed. Rather, the only positive relationship occurs between job satisfaction and intellectual abilities.