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Why Are the Unemployed So Unhappy?Evidence from Panel Data

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  • Liliana Winkelmann
  • Rainer Winkelmann

Abstract

This paper tests for the importance of non‐pecuniary costs of unemployment using a longitudinal data‐set on life‐satisfaction of working‐age men in Germany. We show that unemployment has a large detrimental effect on satisfaction after individual specific fixed effects are controlled for. The non‐pecuniary effect is much larger than the effect that stems from the associated loss of income.

Suggested Citation

  • Liliana Winkelmann & Rainer Winkelmann, 1998. "Why Are the Unemployed So Unhappy?Evidence from Panel Data," Economica, London School of Economics and Political Science, vol. 65(257), pages 1-15, February.
    • Handle: RePEc:bla:econom:v:65:y:1998:i:257:p:1-15
    DOI: 10.1111/1468-0335.00111
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