Is It All About the Money? The Trade-Off Between Work–Life Balance Today and Saving for the Future
Work–life balance (WLB) has become an important issue in the last two decades, and it is a challenge that working people face all over the world. Nevertheless, improving WLB can come with a price. In fact, it can have a negative effect on career advancement in the long run. For example, to improve their WLB some people choose to work part-time with reduced salary and reduced social benefits, thereby reducing their potential lifetime savings. Others might choose to become self-employed. On the one hand, self-employed workers' wellbeing has been found to be higher than salaried workers’ because of higher flexibility, autonomy, and independence. On the other hand, self-employed workers have lower job security, higher income uncertainty, and fewer social benefits such as a pension fund or health insurance, compared to salaried workers.
In this article we present our exploration of the long-term impact of improving WLB in the present. Specifically, we examined whether people are willing to improve their WLB today at the expense of their long-term savings. The baseline assumption, based on classical economic thought, was that (i) people who focus more on the present and less on the future will want to improve their WLB today even if the price is less savings and less income in retirement, whereas (ii) people who focus more on the future than on the present will prefer less WLB just to maintain their savings level for the future and their income in retirement.
We then present a novel perspective that differs from the baseline assumptions. This alternative takes into consideration that improving WLB today might also positively impact future wellbeing because of better WLB and better health in the future, although savings and retirement income will be reduced. As a result, people who are more focused on the future will be motivated to improve their WLB today.
We built a theoretical framework with which to explore the situations in which people who focus more on the future are willing to improve their WLB today at the expense of their long-term savings. We sought to explain why and how people may understand the long-term impact of improving WLB today. To test the theoretical framework we ran a scenario-based experiment with 228 student participants and asked them to choose between nonbalanced work with full retirement and job benefits and balanced work with fewer retirement and job benefits. We concentrated on three components of WLB: stress, flexible work hours, and boundaries between work time and nonwork time. The results of the experiment show that in some cases people who are more focused on the future are more willing to improve their WLB at the expense of long-term savings, consistent with the theoretical framework. This result has important implications for policy makers, as people who are focused on the future seem willing to sacrifice some of their savings to improve their WLB today at the expense of income in retirement.
In this article we present our exploration of the long-term impact of improving WLB in the present. Specifically, we examined whether people are willing to improve their WLB today at the expense of their long-term savings. The baseline assumption, based on classical economic thought, was that (i) people who focus more on the present and less on the future will want to improve their WLB today even if the price is less savings and less income in retirement, whereas (ii) people who focus more on the future than on the present will prefer less WLB just to maintain their savings level for the future and their income in retirement.
We then present a novel perspective that differs from the baseline assumptions. This alternative takes into consideration that improving WLB today might also positively impact future wellbeing because of better WLB and better health in the future, although savings and retirement income will be reduced. As a result, people who are more focused on the future will be motivated to improve their WLB today.
We built a theoretical framework with which to explore the situations in which people who focus more on the future are willing to improve their WLB today at the expense of their long-term savings. We sought to explain why and how people may understand the long-term impact of improving WLB today. To test the theoretical framework we ran a scenario-based experiment with 228 student participants and asked them to choose between nonbalanced work with full retirement and job benefits and balanced work with fewer retirement and job benefits. We concentrated on three components of WLB: stress, flexible work hours, and boundaries between work time and nonwork time. The results of the experiment show that in some cases people who are more focused on the future are more willing to improve their WLB at the expense of long-term savings, consistent with the theoretical framework. This result has important implications for policy makers, as people who are focused on the future seem willing to sacrifice some of their savings to improve their WLB today at the expense of income in retirement.