What is the Relationship Between Happiness and Work?

There probably isn't a direct relation between work and happiness except in the most extraordinary cases. The relation is probably via fulfillment. You cannot be happy in any deep sense without fulfillment. Freud described work as a 'path' to happiness. He noted that work is a source of satisfaction only where it is freely chosen, and sadly this probably isn't the normal case. Even then he talks of 'professional activity' and not manual labor.

Freud said in The Future of an Illusion that civilization rests on a 'compulsion' to work. I don't think people feel, in the main, compelled to do a job. For Freud, the impulse to work is a sublimation of sexual instincts. That is, the impulse to work displaces erotic instincts and provides satisfaction through being involved in reality, or the human community. However, Freud claimed that persons differ and the man who is predominantly erotic will prefer to seek the path to happiness through relationships, whereas a narcissistic man will seek satisfaction in his mental processes. Furthermore, he urges people not to seek satisfaction from a single aspiration.

When we work from necessity, this is because we need money. But there are all sorts of other ways in which we can look at work. It might be bringing up the children or doing the gardening, and in this sense most people are compelled to work because we naturally seek fulfillment and strive for happiness.