This study explores whether happiness increases productivity. Using a piece rate setting, the authors provide evidence that happiness improves productivity. In three different experiments, randomly selected individuals were made happier, and their productivity increased by approximately 12%. A fourth experiment found that lower happiness is associated with lower productivity, particularly after major real-life shocks like bereavement and family illness. These findings suggest a causal link between well-being and performance. The study uses a variety of experimental designs, including lab-based experiments and real-world data, to examine the relationship between happiness and productivity. The results show that happier individuals are more productive, with a 10%–12% increase in productivity in lab settings. The study also finds that productivity is affected by both short-term happiness and long-term well-being. The authors note that while happier workers are more productive, this does not necessarily mean that employers should invest more in employee well-being. The experiments show that small increases in happiness can lead to significant productivity gains, but the long-term benefits and costs of such investments are not fully understood. The study is the first to examine the relationship between happiness and productivity in a true piece rate setting and to use real-world data on tragic family events as a natural experiment. The findings have implications for both economics and management, suggesting that well-being can influence productivity and that firms should consider the impact of employee well-being on performance. The study also highlights the importance of understanding the mechanisms behind the relationship between happiness and productivity, such as the role of mental concentration and the effects of worry and distraction.This study explores whether happiness increases productivity. Using a piece rate setting, the authors provide evidence that happiness improves productivity. In three different experiments, randomly selected individuals were made happier, and their productivity increased by approximately 12%. A fourth experiment found that lower happiness is associated with lower productivity, particularly after major real-life shocks like bereavement and family illness. These findings suggest a causal link between well-being and performance. The study uses a variety of experimental designs, including lab-based experiments and real-world data, to examine the relationship between happiness and productivity. The results show that happier individuals are more productive, with a 10%–12% increase in productivity in lab settings. The study also finds that productivity is affected by both short-term happiness and long-term well-being. The authors note that while happier workers are more productive, this does not necessarily mean that employers should invest more in employee well-being. The experiments show that small increases in happiness can lead to significant productivity gains, but the long-term benefits and costs of such investments are not fully understood. The study is the first to examine the relationship between happiness and productivity in a true piece rate setting and to use real-world data on tragic family events as a natural experiment. The findings have implications for both economics and management, suggesting that well-being can influence productivity and that firms should consider the impact of employee well-being on performance. The study also highlights the importance of understanding the mechanisms behind the relationship between happiness and productivity, such as the role of mental concentration and the effects of worry and distraction.