Happier at Work? The Impact of Working at an Employee-Owned Firm and Working from Home on Job Satisfaction

This paper examines the impact of working for an ESOP firm and Working-From-Home (WFH) on job satisfaction in the National Longitudinal Survey of Youth 1997 (NLSY97) and the General Social Science (GSS) survey. It finds that job satisfaction is higher for employees in ESOPs than for observationally similar workers in non-ESOP firms and for WFH workers than for their non-WFH peers. Fixed effect analysis of the NLSY97 finds that both ESOP and WFH employment raise job satisfaction for the same worker when he/she changes work status. The channels through which the two conditions raise satisfaction appear to differ: ESOPs raise satisfaction by increasing worker participation on collective workplace or firm decisions while WFH raise satisfaction by increasing worker flexibility in their individual work activity. Both participation and flexibility also raise job satisfaction independently. The data further show ESOPs had more extensive WFH than non-ESOP firms during the Covid-19 pandemic.