Even though money doesn’t necessarily buy happiness, a Stanford professor has shown that the way workers get their paychecks may matter more to their happiness than previously believed.

In a paper this fall, Jeffrey Pfeffer, a professor in the Graduate School of Business, found evidence to support the correlation between payment method and happiness. According to his findings, those who are paid by the hour are happier than those who are paid the same amount in a yearly salary because of closer ties between work hours and earnings.

In his research, entitled “When Is Happiness About How Much You Earn? The Effect of Hourly Payment on the Money Happiness Connection,” Pfeffer attempted to take a new look at the long-debated connection between money and happiness.

“There has been, for a long time, a debate — believe it or not — in the literature as to whether money actually produces happiness,” Pfeffer said, mentioning in particular the Easterlin paradox.

The paradox, written in 1974, showed that within a single country, greater wealth traditionally translates to greater happiness, but that between richer and poorer countries, average earners within separate nations felt little overall difference in happiness. Pfeffer expanded upon this paradox, noticing that while income tends to increase over time in industrialized countries, general rates of happiness are stagnant.

“The question was framed not quite correctly,” Pfeffer said. The issue, he explained, was not if increases or variations in economic status produce happiness, but that changes in happiness must stem from a different source.

To answer these questions, Pfeffer teamed up with a professor at the University of Toronto, Sanford E. DeVoe, and used previously taken survey data. Some came from the 2002 U.S. edition of the General Social Survey, while other data was supplied through the use of the General Health Questionnaire and the Satisfaction With Life Scale.

Using the data these surveys provided, the two researchers ran a secondary analysis, combined with experiments carried out personally by Pfeffer and DeVoe.

“One of the conditions that made sense to explore in this research [was] things that made money…focal in people’s minds,” Pfeffer said.

Employees paid by the hour paid by the hour focus more on money, and, as a result, especially in national survey data, there was a stronger connection between happiness and hourly pay than there was between happiness and salary pay.