Working for fun? The impact of employment in the arts sector on wellbeing

Abstract

Despite the prospect of adverse financial and employment outcomes, the labour market for arts workers is often characterised with an excess supply of workers. Several theories have been proposed to explain this puzzle. In recent years one theory that has gained prominence is that employment in the arts provides workers with high wellbeing, which may compensate them for the low pay they receive. Using New Zealand Census and household survey data, this study finds that on average arts workers earn about 20% less than non-arts workers, however about half to two thirds of this pay gap can be explained by differences in observed characteristics between the two groups. While causality is not formally proved, we provide indirect evidence that employment in the arts sector has a positive impact on wellbeing. This additional wellbeing may be considered psychic income, which could be one reason why some people stay in the arts labour market despite the prospect of lower pay.