Relational Goods and Well-Being of People Working in The Italian Social Cooperatives

The difference between “material needs”, which can only be satisfied by private activities,  and “relational needs”, whose satisfaction implies interactions among people, is crucial to identify the factors that influence “subjective well-being”[1].

Although it is a long time since social sciences have recognized that individual well-being depends not simply on the satisfaction of material needs, but also on the satisfaction of relational needs, only by the second half of the past century, the economic theory started to focus on the relational aspects of the interactions among people and to emphasize the importance of the interpersonal dimension of the human action in influencing subjective well being.

Contrary to the assumptions underlying the neoclassical orthodox theory, in reach country, higher levels of per capita income not always imply higher levels of individual well-being: in other words, money not always buy happiness. According to the literature on the “happiness - income paradox” (Easterlin, 2001; Ng, 1978), this is likely to happen since a person, satisfied her/his basic needs, does not enjoy her/his income in absolute terms, but in relative terms with respect to other people and/or with respect to previous income.

 Within the current debate on “subjective well-being”, the low production of relational goods is considered one of the most important causes of the decline of happiness in contemporary societies (Lane, 2000).

The above considerations can be assumed as the starting point of this paper.

As pointed out by much of the literature (see among others Borzaga and Depedri, 2005; Borzaga and Musella, 2003), entrepreneurial non-profit organizations are more orientated than capitalist enterprises to provide a work environment where the quality of interpersonal relationships (among colleagues and between workers and users of the services) is important.

By and large, human relationships are not easy to analyse, both as regards their quantity and their quality. In this paper, human relationships are defined as production and, at the same time, consumption of relational goods. “One can define a relational good as one that produces utility to the consumer only if shared with other subjects” (Zamagni, 1999, p. 225). Relational goods are ‘intangible goods’: in particular, they derive from personal interaction which generates intangible entities that did not exist before and the interactants play the role of co-producers (Gui, 2000, p. 152).

Moving from the above assumptions, the main aim of this paper is to understand if relational goods produced and consumed within social cooperatives influence workers well-being.   

In particular, the paper is structured into two sections. In order to study the question from a theoretical point of view, the first section will analyse the link between happiness and relational goods. To investigate on “relationality” as a key determinant of people happiness, it is worth taking into consideration studies conducted on the “happiness - income paradox” (Easterlin, 2001; Pugno, 2006; Becchetti, Londono and Trovato, 2006; Becchetti, 2007; Nappo and Verde, 2008), as well as the literature on relational goods (Gui and Sugden, 2005; Gui, 1987; Ulhaner, 1989). Brief consideration of both these streams of literature is regarded as a preliminary step to the empirical part of the paper.

The main aim of the second section is to assess the effects of relational goods [as regards which will be taken into consideration both quantity (time spent in relationships can be considered a proxy of the amount of relational goods) and quality (satisfaction with relationships can be considered a proxy of the quality of relational goods] on satisfaction with life. In particular, as already said, only relationships established within the work environment (among colleagues; between the worker and her/his superiors; between the worker and voluntary workers; between the worker and the service users) will be considered.

Individual data provided by the Survey on the Italian Social Cooperatives (ICSI, 2007) will be employed in the econometric analysis. The main objective of the Survey is to deepen the knowledge of the Italian Social Cooperatives (type A cooperatives, which provide social, health and educational services, as well as type B cooperatives, which provide employment for disadvantaged people) and of people who work and volunteer within social cooperatives. Data were collected through questionnaires distributed to a sample of 312 social cooperatives and to a corresponding sample of 289 volunteers and 4134 workers.   

As regards the methodology, the theoretical hypotheses will be tested by employing standard Probit models.  

In equation (1) the dummy of life satisfaction will be regressed against the vector of
controls.

Where  stands for individuals;  is the dummy of satisfaction with life;  is the   
vector of demographic, socio-economic factors and status, with the associated vector of control coefficients b. R is the vector of regional dummy with the associated vector of
coefficients g. Finally, F  is the standard normal cumulative density function. The estimate of
the b coefficients aims to get a confirmation of the determinants of satisfaction with
life.

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[1] The definition of “subjective well-being” that will be adopted in this paper is broad. In particular, the concepts of happiness, subjective well-being and satisfaction with life will be considered as substitutes. On this point see Easterlin (2000).