Nonmonetary Incentives and the Implications of Work as a Source of Meaning

Empirical research in economics has begun to explore the idea that workers care about nonmonetary aspects of work. An increasing number of economic studies using survey and experimental methods have shown that nonmonetary incentives and nonpecuniary aspects of one's job have substantial impacts on job satisfaction, productivity, and labor supply. By drawing on this evidence and relating it to the literature in psychology, this paper argues that work represents much more than simply earning an income: for many people, work is a source of meaning. In the next section, we give an economic interpretation of meaningful work and emphasize how it is affected by the mission of the organization and the extent to which job design fulfills the three psychological needs at the basis of self-determination theory: autonomy, competence, and relatedness. We point to the evidence that not everyone cares about having a meaningful job and discuss potential sources of this heterogeneity. We sketch a theoretical framework to start to formalize work as a source of meaning and think about how to incorporate this idea into agency theory and labor supply models. We discuss how workers' search for meaning may affect the design of monetary and nonmonetary incentives. We conclude by suggesting some insights and open questions for future research.