Job satisfaction and subjective well-being in Europe

This paper goes through some recent developments in the field of management science and economics of well-being, trying to prove a link between working conditions and subjective well-being. Using the fifth round of the European Social Survey, which is the most recent set of data with a module focusing on the inter-relations between work, family and well-being, this paper uses an instrumental variable approach to estimate the effect of job satisfaction on subjective Well-being. The direction of the relationship between these two variables has always been controversial because of endogeneity. Results, also exploring the role of working contract and welfare systems, allow for isolating a considerable influence on job satisfaction in increasing people's subjective well-being. Results are robust even if the restriction condition is violated. Job satisfaction increases subjective well-being even if the instrumental variables are not uncorrelated with the error of the main equation.