Love your job? Thank the country where you live

Guest Column:
Edmund Phelps
It is widely assumed that people in economically “advanced” countries do not differ significantly in how satisfied they are with their jobs. Because they are about equally productive, the reasoning is, they must produce things the same way, and so their work experience must be the same, too. More

To continue reading this article, please do one of the following.



OP-ED / LETTERS TO THE EDITOR

Love your job? Thank the country where you live

Guest Column:
Edmund Phelps
Posted 8/26/13

It is widely assumed that people in economically “advanced” countries do not differ significantly in how satisfied they are with their jobs. Because they are about equally productive, the reasoning is, they must produce things the same way, and so their work experience must be the same, too.

In fact, there are striking differences in job satisfaction within the West. The U.K., with very low wages relative to the country’s wealth, reports a pretty decent level of job satisfaction. Yet Germany, with its fairly high wages relative to wealth, reports an undistinguished level of job satisfaction – below Italy and Spain.

The waves of data on reported job satisfaction that have washed up in recent decades have led to misuses and misinterpretation. Some observers, pointing to Sweden’s high score, take this to be evidence that the Swedish economic system – a unique mixture of capitalism and welfarism with little dynamism – is “best.” Others, pointing out that Denmark scored even higher, conclude that the Danish system – with its flexicurity or some other attraction – is the best.

That way of using the data is absurd. It’s a schoolboy error in Statistics 101 to draw inferences from outliers rather than from the data as a whole.

The plausibility of the job-satisfaction levels reported in surveys receives a big boost from the way people assess the pride they take in their work and the importance they place on their job. The rankings of countries by these two measures are very similar to their ranking by job satisfaction. Among the Group of Seven, the U.S., one of the top countries in mean job satisfaction, scored highest in both pride and importance.

A contrarian interpretation argues that a country’s low score on reported job satisfaction may be more about how demanding the respondents are than how unstimulating their jobs are. They may suffer low satisfaction because, as in Italy and France, they are spoiled by their wealth.

But the U.S. and Canada have not lacked for wealth, especially in 2001, after the dot-com boom, and they continually rank high in job satisfaction. And when Ireland went from being poor to rich in a decade, it remained near the top among advanced countries in job satisfaction.

In recent decades, comparative studies of Western European economies have implicitly assumed that their basic economic system – a corporatist system that lets big business, big labor and big government have a veto over market outcomes – is about as effective as the modern capitalist system in meeting a variety of goals.

This view, pronounced by academic economists from the University of Chicago to the Massachusetts Institute of Technology, is a tenet of neoliberalism, which holds that, to succeed, a country has only to prohibit the government and the market from overturning competitive prices and wages. Yet a country cannot do well without high economic dynamism. And it cannot have much dynamism without institutions and an economic culture that support conceivers of new commercial ideas, facilitate entrepreneurs to develop these new ideas, allow employees to contract to work long and hard, and protect against fraud.

There is evidence that countries with high levels of state spending on medical care, retirement benefits and education do not tend to have depressed levels of job satisfaction.

Regulatory institutions appear to be a significant depressant on job satisfaction, particularly credit-market regulations (such as interest-rate controls) and goods-market regulations. The institutions of collective bargaining and regulations on hiring and firing are also estimated to depress mean job satisfaction.

How much people in a given country value the “interestingness of a job” is significantly related to how well the country scores in several dimensions of economic performance. So are people’s scores on acceptance of new ideas and the desire to have some initiative. On the other hand, a low willingness to take orders, which is conspicuous in some European nations, is associated with lower economic performance.

A readiness to accept change and a willingness to accept competition are also quite helpful. But a desire to achieve matters little: It is not some object people want; it is the experience – the life. •


Edmund Phelps is the director of the Center on Capitalism and Society at Columbia University and dean of the New Huadu Business School at Minjiang University. This is an excerpt from his book, “Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change.” Distributed by Bloomberg View.

Calendar
PBN Hosted
Events

Please join PBN on September 10th for the 3rd Annual Fastest Growing & Innovative Companies program at Rosecliff Mansion in Newport. Seating is limited so be sure to register early.
Advertisement
Purchase Data
Book of Lists
Lists
Book of Lists cover
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.
Data icons
Data can be purchased as single lists, in either Excel or PDF format; the entire database of the published book, in Excel format; or a printed copy of the Book of Lists.
  • Purchase an e-File of a single list
  •  
  • Purchase an e-File of the entire Book of Lists database
  •  
  • Purchase a printed copy of the Book of Lists
  •  
    National
    Local
    Latest News
    Advertisement