Responsible Career Management: New Insights from a Salary and Happiness Study
Responsible career management is all about finding career opportunities that successfully blend financial return with social impact and environmental responsibility. Â But what salary and other compensation is 'good enough' to lead to happiness? Â A new study by Daniel Kahneman (2002 Nobel Prize in Economics) and Angus Deaton reveals an interesting threshold, about $75,000 per year, above which money does not buy more happiness.
The new study was published in the high profile Proceedings of the National of the Academy of Science (PNAS) journal. Â The authors analyzed a Gallup data set that focused on self-reported measures of a variety of dimensions, including education levels, marital status, health conditions, income level, as well as two measures of 'happiness'. The first happiness measure, emotional well-being, was defined by the authors as the 'emotional quality of anÂ individualâs everyday experienceâthe frequency and intensity of experiencesÂ of joy, stress, sadness, anger, and affection that make oneâsÂ life pleasant or unpleasant'. Â The second 'happiness measure' was operationalized as 'life evaluation', which referred to 'the thoughts thatÂ people have about their life when they think about it'. Â Therefore, the 'emotional well-being' measure was more concrete and short-term while the 'life evaluation' measure what more abstract and long-term. Â Not surprisingly,Â low income is associated bothÂ with low emotional well-being and low life evaluation. Â This means that, no matter whether they had a responsible career or not, people that are members of a US household with an annual income lower than $75,000 are less satisfied with both their daily life and their overall quality of life.
Even more interesting for professionals interested in responsible careers, for members of US households that had an income greater than $75,000, 'life evaluation' scores did rise with income, but 'emotional well-being' did not. Â This means that above a stable income of $75,000, the daily happiness and quality of life of people in the US has less to do with money than it has to do withÂ temperament and life circumstances, such as marital status, education level, and health conditions. Â Importantly, according to the 2008 American Community Survey, the median US household income wasÂ $52,000, and only about a third of US households has incomes equal or greater than $75,000. Â This means that if you are a member of the 33% of US households that earn over $75,000 per year, you might revisit the notion of 'more is better'. Â Furthermore, this article also provides interesting insights into happiness in the United States (US) as compared with 150 other countries. Â Americans are among the top 5 countries reporting the highest level of stress, they are among the countries that report high levels of worry and anger (89th and 75th from best respectively). Â This indicates that Americans, as compared with citizens of other countries live relatively stressful lives, in which worry and anger levels are also relatively high.
Unfortunately, this study does not focus on comparing professionals that are employed by socially and environmentally responsible entities. Â It would be interesting to analyze whether building a responsible career plays a role in both life evaluation and emotional well-being. Â For instance, would professionals being involved in getting business done better through Corporate Social Responsibility, social entrepreneurship, or nonprofit management, have a lower income threshold at which emotional well-being would level off? Â Would these professionals show lower levels of stress, worry, and anger than the general sample? Â Future studies will be needed to test these hypotheses.
For now, think about your current responsible career trajectory and your income. Â Have you been delaying a career move because you were afraid of making a responsible career move? Â Were you worried that you would not make enough money to live the life you want? Â Take a moment to revisit your notion of happiness and what role money plays in determining your level of happiness. Â It is likely that business as usual will continue relying on 'more is better' approaches to retention and employee engagement. Â What salary number would you be able (and willing) to trade to increase your emotional well-being and your overall quality of life?
As always, I look forward to your comments and questions in the comment box below!