A while ago there was an interesting article in the Orion magazine [1] that talks about this. It claims that people would become happier, even with less pay, when they work less and have more time to spend on family and friends. Apparently Kellog's tried a reduced work week for a while and the workers didn't want to change things back.

[1] http://www.orionmagazine.org/index.php/articles/article/2962...