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Would you Value a few More Hours of work? Underemployment and Subjective Well-Being Across Chilean Workers

Author

Listed:
  • Gabriel Rodríguez-Puello

    (Universidad Tecnológica de Bolívar)

  • Ariel Arcos

    (Universidad Católica del Norte)

  • Benjamin Jara

    (Gran Sasso Science Institute)

Abstract

Underemployment has gained attention in recent years because of its effects on health and well-being (life satisfaction), it is a widespread phenomenon in the labor force that affects not only workers, but also households, companies and governments. This paper explores the relationship between underemployment and subjective well-being for a representative sample of Chilean workers using an ordered probit model. Also, by using different underemployment definitions and a latent class ordered probit model we analyze the observed and unobserved heterogeneity in this relationship. Finally, we assess the monetary valuation of well-being costs by estimating the amount of money that a worker is willing to accept in order to bear the potential negative effects of underemployment on well-being. Our results find a negative relationship between underemployment and subjective well-being, as the average worker is willing to accept an increase of CLP$64,009 (roughly 30.5% of the minimum wage) in her/his monthly wage for being underemployed. If we take into account the observed and unobserved heterogeneity, our results identify a group that is not sensitive to underemployment, while others are willing to accept an increase of CLP$146,622 in her/his monthly wage for being underemployed. Our work highlights the importance of well-being in the workplace and has implications for labor flexibility legislation and the empowerment of workers. Heterogeneous responses to underemployment imply that one-size-fits-all policies to regulate working hours might not suffice.

Suggested Citation

  • Gabriel Rodríguez-Puello & Ariel Arcos & Benjamin Jara, 2022. "Would you Value a few More Hours of work? Underemployment and Subjective Well-Being Across Chilean Workers," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 17(2), pages 885-912, April.
    • Handle: RePEc:spr:ariqol:v:17:y:2022:i:2:d:10.1007_s11482-021-09941-7
    DOI: 10.1007/s11482-021-09941-7
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