Working for a commercial organisation, especially in a senior position, there may be more scope for bigger pay cheques, performance bonuses and a company car, but a new study in the Journal of Economic Psychology finds that British people who work for not-for-profit organisations, including charities and social enterprises (also known as the third sector), are the real winners. Controlling for the influence of other relevant personal factors such as marital status and education, workers at non-profit organisations tend to be much happier with their lives than for-profit workers, more satisfied with their jobs (including their hours and job security), they enjoy their day-to-day activities more, and they believe more strongly that they are playing a useful role in life.
Indeed, based on what we know about the effects of higher pay on happiness, the author of the study Martin Binder estimates that a for-profit worker would have to earn an extra £27,000 per year (based on salaries between 1996 to 2008) to be as happy as a person working similar hours for a not-for-profit organisation.
The findings come from detailed data collected as part of the British Household Panel Survey from 1996 to 2008, which included answers from 12,786 people employed in private firms and 966 people employed in non-profit organisations (note, civil servants, NHS employees, military personnel and staff in higher education were not included in this analysis). Other details from the research include the finding that women and higher educated people are more likely to work for non-profit organisations, and that the higher happiness among non-profit workers is seen across all individuals regardless of their baseline happiness at the start of the study.
A weakness of the research is that it can’t show for sure that working for a non-profit organisation causes greater happiness – perhaps happier people are more likely to choose to work for non-profit organisations. Another possibility is that non-profit employment may only lead to greater happiness for people who are more altruistic by nature. Arguing against this, Binder found that life satisfaction was higher among non-profit workers regardless of their score on the personality trait of agreeableness – not the same as altruism, but a useful proxy. Nonetheless, Binder recommends that “the question of self-selection needs to be further explored before one can generalise that everybody would be happier when working in the third sector”.
Binder also cautions that not all non-profit work is the same – it remains to be seen if the findings would apply to particularly challenging jobs such as in private care-giving roles. That said, he concludes on an up-beat note: “The fact that people who do good also ‘do it with [more] joy’ than others seems a heartening finding with relevance for organising the workforce of the future.”
Binder, M. (2016). “…Do it with joy!” – Subjective well-being outcomes of working in non-profit organizations Journal of Economic Psychology, 54, 64-84 DOI: 10.1016/j.joep.2016.03.003
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