For Love or Money

I’ve always been keen to do work that I find intellectually challenging and worthwhile. If you have to spend half your waking life working, you should make the best use of that time and do something which will be worthwhile, both in terms of a useful outcome rather than a bullshit job (yes, its the Graeber piece, and yes, I’m going to keep linking it forever) and in terms of personal growth. Or at worst, one of the two. But it seems like I’m in a substantial minority on this, judging from the incredulous reactions I get to the idea of intellectual stagnation in a career. I’ll address that point once I get around to writing my treatise on intellectual stagnation and our society. But for now, I’m interested in looking at whether enough additional money can be sufficient to make up for a job which is unfulfilling.

I touched on this in the original version of my self-images post, querying whether my self-image as a difference-maker was getting in the way of what might be the more logical career path. But after some more wooing by recruiters on behalf of the building services industry, it is starting to become apparent the sums I’d be leaving on the table by chasing a dream.


The after tax difference between my market value in building services and what I’d be willing to settle for in something more worthwhile (presuming that I can get out of my pigeonhole and into that position) is substantial. Pulling up the ABS figures from 2013-14, my estimation is that this difference is around the equivalised after tax income for a single person household in the 30th percentile. So even just the difference between career options is as much income as some of my friends make, which is obscene, but that’s capitalism! So can money buy happiness? I’m going to look at the generalised case supported by research data and then add my own peculiarities to the mix.


Economic practice has generally aimed to maximise utility and used absolute utility as a sufficient stand-in for wellbeing. But Luttmer’s rigorous 2004 research showed that although there is an impact of absolute income, income relative to neighbours is more important to drive happiness. While this relative effect is useful for my hypothesis of relative social status as societal driver, it can be neglected if I don’t move location. So for a perfectly spherical me of uniform density, increasing income would tend to increase happiness. Luttmer also looked at the components correlation with happiness, which gave the following statistically significant impactors in order of correlation:

Component Coefficient Standard Error
Satisfaction with family life 0.278 0.019
Satisfaction with financial situation 0.144 0.013
Satisfaction with sex life 0.098 0.011
Satisfaction with home 0.092 0.016
Satisfaction with health 0.088 0.019
Satisfaction with present job 0.053 0.014
Satisfaction with friendships 0.042 0.018
Satisfaction with amount of leisure time 0.039 0.013

So financial situation is the second biggest driver of happiness, and substantially more important than satisfaction with present job. It is notable that these come from an American example, and there is likely to be some variation between cultures. There were also other items which, although not the subject of the study and thus not independently controlled for could be fun to take a look at. I’ve picked out some of the more interesting statistically significant (though again I need to stress, not independently controlled for) items into the table below.

Component Baseline Coefficient Standard Error
Value of home 0.052 0.021
Renter -0.182 0.032
Unemployed -0.428 0.124
Not in the labor force 0.149 0.043
Ln household size -0.166 0.038
No religion 0.17 0.058

The home value and renter components probably line up pretty well with individual income, so I’m doubtful that they would be individually significant. Interestingly, being unemployed has a large negative impact on happiness, but being out of the labor force has a positive one. So I suppose retiring early would be positive, but only if I can actually afford it. One point not noted in the table is that there is very minimal (and well short of statistically significant) correlation between years of education and happiness.


Moving to try and figure some other relevant drivers, Stulzer’s 2002 paper examines the impact of income aspirations on happiness. This finds that higher income aspirations reduce people’s happiness (and ties in with Luttmer in that higher income aspirations are associated with communities having higher incomes). Stulzer also shows that as income increases, so do aspirations (though the increase is smaller than 1:1), which is another point for the future relative social status post. Despite this, there is once again a substantial impact of income on happiness, when considered on average. Given that I’m writing this post rather than just taking the job which pays the most, it should be self-evident that my income aspirations are quite low. If any more evidence was needed, note that the most expensive thing I’ve ever bought (to age 29) is a $2,000 pushbike!


To look more closely at the relationship between job satisfaction and happiness, we can refer to Bowling, Eschleman & Wang’s 2010 paper, which provides a meta-analysis. This shows a couple of points – firstly, that there haven’t actually been many studies looking at the links between job satisfaction and happiness. There are plenty looking at the relationship between job satisfaction and job performance, so I suppose that’s where the research money is available. Given that as few as two studies compare happiness with job satisfaction using detailed sub-components, I’m going to present the relationships with life satisfaction instead, which have a substantially more complete dataset and should be a close enough analogue for a blog post. The table below is reproduced and abridged from Bowling, Eschleman & Wang, showing average corrected correlation coefficients between life satisfaction and the listed area.

Variable Average corrected correlation coefficient
Global job satisfaction 0.48
Satisfaction with work itself 0.21
Satisfaction with supervisors 0.2
Satisfaction with co-workers 0.23
Satisfaction with pay 0.21
Satisfaction with promotion 0.14
Facet satisfaction composite 0.36

So there is a strong correlation between job satisfaction and life satisfaction, but this result is less significant than it seems. This is because job satisfaction includes not only satisfaction with the work, but also with other workers, pay and promotion prospects. In fact, the coefficients associated with satisfaction with work itself and satisfaction with pay are identical. Given these are the two variables we’re trying to decide between, it puts us in a sticky situation. This inclusion of pay satisfaction within the job satisfaction criterion is a problem which crops up in virtually all the studies I’ve found. Referring back to my initial query on this, it seems I’m definately weird to be asking this question. However, we can say that there is a link between job satisfaction and happiness, even if we can’t really determine how much of this is down to the pay aspect of a job.


Now as we’ve seen, I’m weird. I’ve certainly never felt motivated by money, nor keen to get a big stack of it. Enough to satisfy my basic needs is a given, regardless of which path I might take. Certainly my feeling is that I’d be happier with challenging and worthwhile work than with a big salary. However, my inability to actually get this in my career so far may be evidence that I’ll never actually be satisfied. I do have a tendency to tire of hobbies and move on to learn something new after time, which does support this hypothesis. But then again, this flittering between hobbies is equally likely to be due to dissatisfaction with the intellectual stagnation I have endured at work. So I’m not ready to discard the potential for fulfillment at work, or at least not without collecting more data. If it is possible for me to be fulfilled and challenged by work, that feels more important to me than just having more money.


So despite the data showing that on average money does buy happiness, I’m not convinced that it applies to me. I’ve also seen that in trying to separate satisfaction with work from pay satisfaction, I’m unusual even amongst the folks who study this stuff, which is a pretty strong indicator that I’m an outlier and won’t necessarily follow the average. So I’ll maintain my current heading, trying to find something worthwhile and challenging. But if someone offers me a big pile of money to do something less interesting, I probably won’t regret taking it.