Study shows being happy pays off financially
We've all heard the expression money can't buy happiness, but new research from The University of Western Sydney may have proved the reverse. It turns out that cheerfulness attracts money.
After many years of examining the influence money has on happiness, Professor of Economics Satya Paul from the University of Western Sydney turned the question on its head to examine whether being happy attracts a higher paycheck.
According to Professor Paul, income has less of an effect on our happiness that we think. "Income doesn't have a significant effect on happiness but I wondered if happy people were more productive than others and if that could affect their income generation through how much they worked," he said.
Looking at the self-rates happiness levels of 9300 people between 2001 and 2005 in the Household, Income and Labour Dynamics in Australia survey, Professor Paul found that happier people get more done at work and are paid more. "We found that happy people are more active, more productive and get less upset by the work," he said.
In fact, depending where you rank on the happiness index can directly affect your paycheck. The report also remarked that when factors such as age, education and geographic location were the same, "Happy" Australians earned about $1766.70 a year more than those at the bottom of the happiness scale. For every one point rise in happiness on this scale, he found, a person's income would rise by $176.67.
His findings also revealed two classes of happy workers: those who worked long hours because they love what they do and those who worked less, maintaining a work/life balance, taking more frequent holidays that led to feeling relaxed and productive at work.
"Happy people can like to have more leisure time in their lives and work less... but are actually more productive as a result of that leisure time," he explained. At the other end of the spectrum, it was found that happiness levels and paycheck are also tied to the number of hours a person works. "Happiness affects hours, happy people tend to work more and their incomes increase," he said.
Professor Paul also looked at the influence of several other factors on income and found that people with university degrees earn $8408 more than others and that females earn about $8781 less than males. However, happiness was actually found to reduce these kinds of inequalities.
According to Professor Paul, the reason for this is that happy people tend to get the same size wage increases as their high income colleagues - meaning that wage increases tend to be proportionately higher. "This is an important lesson we can take ... the more happy people are, the less inequality in income we have in society," he said.
If you're feeling unhappy about your financial situation, give yourself something to smile about by finding a better deal on your credit card or home loan. Who knows, the happy satisfaction of saving money might even attract a pay rise.