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• Working Paper | HBS Working Paper Series | 2020

  Work Values Shape the Relationship Between Stress and (Un)Happiness

  George Ward, Hanne Collins, Michael I. Norton and Ashley V. Whillans

  While global wealth has risen over the past few decades, this has not translated into a less stressful life for most people. In fact, stress has risen for people worldwide. Across six studies— including large-scale survey data from over 150 countries—we show that the typically observed negative association between stress and unhappiness depends critically on the value that people place on work. Using various measures of work values—including individual and area-level historical Protestantism, peer-group working hours, and self-reported measures—we show that the strength of the negative impact of stress on subjective well-being depends upon the extent to which individuals, societies, and cultures more broadly value productive work as a good in itself. These findings emphasize the importance of the “psychological fit” between actions and values in shaping subjective well-being. Using large-scale time-use data, we show that the moderating role of work values can be largely explained by the extent to which these values shape how enjoyable leisure activities are, rather than how they affect people’s experience of work-related activities themselves.

  Keywords: workplace; work culture; stress; Employment; Values and Beliefs; Happiness;

  Citation:

  Ward, George, Hanne Collins, Michael I. Norton, and Ashley V. Whillans. "Work Values Shape the Relationship Between Stress and (Un)Happiness." Harvard Business School Working Paper, No. 21-044, September 2020.  View Details

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• Working Paper | HBS Working Paper Series | 2020

  Consumers Punish Firms that Cut Employee Pay in Response to COVID-19

  Bhavya Mohan, Serena Hagerty and Michael Norton

  Two experiments, including one incentive compatible study, examine the impact of cutting pay for executives versus employees in response to COVID-19 on consumer behavior. Study 1 explores the effect of announcing cuts or no cuts to CEO and employee pay, and shows that firms’ commitment to paying employees their full wages leads to the most positive consumer reactions. Study 2 further examines the effects of announcing employee and CEO pay cuts: though announcing CEO pay cuts in tandem with employee pay cuts can help mitigate the negative effects of employee pay cuts, consumers respond most positively to firms which prioritize paying employees regardless of their strategy for CEO pay. These positive perceptions are mediated by perceptions of financial pain to employees. We discuss the implications of our results for firms and policy-makers during economic crises.

  Keywords: employee furloughs; CEO pay cuts; pay ratios; purchase intention; Health Pandemics; Employees; Wages; Executive Compensation; Consumer Behavior;

  Citation:

  Mohan, Bhavya, Serena Hagerty, and Michael Norton. "Consumers Punish Firms that Cut Employee Pay in Response to COVID-19." Harvard Business School Working Paper, No. 21-020, August 2020.  View Details

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• Article | Journal of Personality and Social Psychology | August 2020

  Does Spending Money on Others Promote Happiness? A Registered Replication Report

  Lara B. Aknin, Elizabeth W. Dunn, Jason Proulx, Iris Lok and Michael I. Norton

  Research indicates that spending money on others—prosocial spending—leads to greater happiness than spending money on oneself (e.g., Dunn, Aknin, & Norton, 2008, 2014). These findings have received widespread attention because they offer insight into why people engage in costly prosocial behavior, and what constitutes happier spending more broadly. However, most studies on prosocial spending (like most research on the emotional benefits of generosity) utilized small sample sizes (n < 100/cell). In light of new, improved standards for evidentiary value, we conducted high-powered registered replications of the central paradigms used in prosocial spending research. In Experiment 1, 712 students were randomly assigned to make a purchase for themselves or a stranger in need and then reported their happiness. As predicted, participants assigned to engage in prosocial (vs. personal) spending reported greater momentary happiness. In Experiment 2, 1950 adults recalled a time they spent money on themselves or someone else and then reported their current happiness; contrary to predictions, participants in the prosocial spending condition did not report greater happiness than those in the personal spending condition. Because low levels of task engagement may have produced these null results, we conducted a replication with minor changes designed to increase engagement; in this Experiment 3 (N = 5,199), participants who recalled a prosocial (vs. personal) spending memory reported greater happiness but differences were small. Taken together, these studies support the hypothesis that spending money on others does promote happiness, but demonstrate that the magnitude of the effect depends on several methodological features.

  Keywords: prosocial spending; Generosity; well-being; replication; Happiness; Behavior; Spending;

  Citation:

  Aknin, Lara B., Elizabeth W. Dunn, Jason Proulx, Iris Lok, and Michael I. Norton. "Does Spending Money on Others Promote Happiness? A Registered Replication Report." Journal of Personality and Social Psychology 119, no. 2 (August 2020).  View Details

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