How happy are people as they work in nonprofit organizations?

Abstract

This study examines the extent to which working for a nonprofit organization (NPO) is associated with happiness in five Asian societies. The dataset of the World Values Survey is employed for empirical analysis. The findings indicate that NPO employment has a favorable effect on happiness and that the roles of NPO workers influence this effect. The increased sense of well-being associated with working for NPOs is related to workers’ occupations, and this relationship is particularly significant for nonsupervisory and highly skilled workers. The happiness enhancement effect is irrelevant for NPO workers engaged in manual tasks. Part-time employment by NPOs is associated with relatively limited enhancement of happiness. Enhancing all employees’ well-being is crucial for the sustainability of NPOs. On the basis of our findings, we suggest that NPOs should implement policies to determine the sources of employee stress to help create a happier workforce and achieve organizational missions effectively.

Keywords:

• Nonprofit organization
• happiness
• paid employment
• supervisor
• occupation
• Asia

JEL classification:

• J17
• I31
• J40
• J50

Acknowledgements

I am very grateful to the editor Dr. Leong Liew, and two anonymous referees for their valuable comments and suggestions which helped to considerably improve the paper. All errors are mine.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Source: Japan NPO Center (http://www.jnpoc.ne.jp/en/nonprofits-in-Japan/), and Singapore Economic Development Board (www.edb.gov.sg/content/edb/en/industries/industries/international-non-profit-organisation.html). In addition, Hong Kong had over 23,300 NPOs in March 2012 (http://www.investhk.gov.hk/zh-hk/files/2012/03/ngo.pdf). Taiwan had more than 80,000 NPOs in 2016 (Social Enterprise Insights http://www.seinsights.asia/en). The number of NPOs in South Korea increased by approximately 45% between 1988 and 2003 (Jeong 2013).

2 The relevant literature has not formulated a consensus regarding earnings differentials between NPOs and POs (e.g., King and Lewis 2017; Leete 2001; Ruhm and Borkoski 2003; Preston 1989; Weisbrod 1983). NPO employees may not demand the same compensation offered by similar POs because NPO employment provides other benefits in addition to income. However, NPOs may pay higher wages than their PO counterparts do for rent-sharing purposes (e.g., King and Lewis 2017; Benz 2005). Furthermore, the compensation of NPO employees relative to that of their PO counterparts might depend on occupation (e.g., Handy and Katz 1998).

3 Huang (2019) revealed a significant positive relationship between active volunteering and well-being in Hong Kong, Japan, Singapore, South Korea, and Taiwan. Wu, Tang, and Yan (2005) noted that compared with nonvolunteers, volunteers have superior physical health and higher life satisfaction. In Taiwan, Chang (2009) and Yao, Cheng, and Cheng (2009) discovered that unpaid volunteer work benefits mental health. Liao, Fu, and Yi (2005) reported similar results in Hong Kong.

4 See Frey and Stutzer (2000) and Jain, Sharma, and Mahendru (2019) for literature reviews.

5 To the best of our knowledge, Esterlin (1974) was the first to suggest that people in rich countries are not necessarily happier than their counterparts residing in poor countries are. This phenomenon is called Esterlin’s paradox. Subsequent studies, such as those of Di Tella and MacCulloch (2006), Stutzer (2004), and Luttmer (2005), have revealed that people might be more concerned about their relative income compared with that of a reference group than they are about their absolute income. Consequently, people’s happiness levels might not increase with their absolute income levels unless their relative income levels have also increased.

6 As noted by Veenhoven (2000), different measurements of well-being can capture different aspects of human welfare, with happiness, life satisfaction, and health being the most common indicators for well-being in previous related studies (Frey and Stutzer 2000). In addition to happiness, we employ life satisfaction and subjective health status as additional measures of well-being in our empirical analysis. Our results reveal that the effects of working in NPOs on life satisfaction are significant only for full-time and skilled workers. No health benefit is revealed by our data for any of the subgroups. This finding differs from those in the literature on unpaid volunteer work. The corresponding estimation results are not presented here for the sake of conciseness, but they are available from the authors upon request. Furthermore, this study includes a variable that represents whether respondents are their households’ primary income earners. However, the empirical results are nearly identical to those presented in Table 1.

7 Source: Japan NPO Center (http://www.jnpoc.ne.jp/en/nonprofits-in-Japan/).

Additional information

Notes on contributors

Li-Hsuan Huang

Li-Hsuan Huang is a professor of economics in the Department of Economics at National Central University, Taiwan.