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The paper aims to disclose the effects of employment type (permanent/temporary, formal/informal, self-employed/hired, part-time/full-time) on subjective well-being across Europe (27 countries). At the end of the 20th century a bigger demand for flexible labour relations was accompanied by a value shift to the expansion of individual freedom, tolerance and creativity (Inglehart & Welzel). The authors use European Social Survey (2010) as empirical basis for the analysis. The main tested idea of the paper is that countries with more liberal labor legislation have higher rates of subjective well-being as less people employed on temporary basis. The results from regression analysis showed that temporary and informal employment negatively affect subjective well-being whereas self-employment influences subjective well-being positively. Employment protection legislation has a negative impact on subjective well-being, especially for informal workers and temporary contractors.