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When work produces utility: challenging the work-for-wage hypothesis
The first-year textbook version of microfunded labor supply assumes that work does not directly
produce utility. Its unique role is that of yielding a wage which allows to buy consumption goods and
leisure which positively contribute to utility. Econometric findings on the relationship between sense
of work and life satisfaction strongly reject this hypothesis. They show that jobs that involve positive
social and environmental impact, participation and sense of belonging to the organisation have a
significantly higher impact on life satisfaction, net of income. On the contrary, 31 percent of survey
respondents indicating that their job is only a mean to get a wage have an around 27 percent lower
probability of declaring themselves very happy, net of the impact of standard controls. These results
are robust to endogeneity concerns using a Generalized Structural Equation Model (GSEM), which
allows for the simultaneous estimation of the relationship between job meaning and life satisfaction.
Lorenzo Semplici
Leonardo Becchetti, Demetrio M. Bova
Year of publication 2025