Job satisfaction and firm earnings—Evidence from matched survey and register data

Abstract

This study examines the relationship between employee job satisfaction and firm performance in a sample of Danish private sector firms. The study relies on a representative survey merged with administrative data and accounting information for a sample of 1,929 Danish firms representing all economic sectors. The results of this study suggest that the average job satisfaction on the firm level positively affects the firms' pre-tax earnings. The effect amounts to a 7.9% increase per point increase in job satisfaction when job satisfaction is measured on a scale from 0 to 10. Furthermore, the study finds that workers' satisfaction with achievements at the job and their satisfaction with management are specifically related to better performance.