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Unemployment and Psychological Well-being

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Author Info
NICK CARROLL

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Abstract

Who records the largest drops in life satisfaction when they move into unemployment? Do men experience a larger drop in life satisfaction? Do Australians and Americans record a larger drop than Europeans? Using panel data, this paper finds that the unemployed in Australia report lower life satisfaction than observationally equivalent employed people (holding current income constant). Being unemployed is estimated to be equivalent to the loss of $A42 100 annual income for men and even more for women. It is found that unemployment is less painful for men in Australia than for men in Germany and the UK. Copyright © 2007 The Economic Society of Australia.

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Article provided by The Economic Society of Australia in its journal Economic Record.

Volume (Year): 83 (2007)
Issue (Month): 262 (09)
Pages: 287-302
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Handle: RePEc:bla:ecorec:v:83:y:2007:i:262:p:287-302

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Ravallion, Martin & Lokshin, Michael, 2000. "Identifying welfare effects from subjective questions," Policy Research Working Paper Series 2301, The World Bank. [Downloadable!]
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  2. Goldsmith, Arthur H. & Veum, Jonathan R. & William Darity, Jr., 1996. "The impact of labor force history on self-esteem and its component parts, anxiety, alienation and depression," Journal of Economic Psychology, Elsevier, vol. 17(2), pages 183-220, April. [Downloadable!] (restricted)
  3. Blanchflower, David G. & Oswald, Andrew J., 2004. "Well-being over time in Britain and the USA," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1359-1386, July. [Downloadable!] (restricted)
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  4. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, 07. [Downloadable!] (restricted)
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  5. Akerlof, George A, 1980. "A Theory of Social Custom, of Which Unemployment May be One Consequence," The Quarterly Journal of Economics, MIT Press, vol. 94(4), pages 749-75, June. [Downloadable!] (restricted)
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  6. Andrew E. Clark, 2003. "Unemployment as a Social Norm: Psychological Evidence from Panel Data," Journal of Labor Economics, University of Chicago Press, vol. 21(2), pages 289-322, April. [Downloadable!]
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  7. Pissarides, Christopher A, 1992. "Loss of Skill during Unemployment and the Persistence of Employment Shocks," The Quarterly Journal of Economics, MIT Press, vol. 107(4), pages 1371-91, November. [Downloadable!] (restricted)
  8. Paul Frijters & John P. Haisken-DeNew & Michael A. Shields, 2004. "Money Does Matter! Evidence from Increasing Real Income and Life Satisfaction in East Germany Following Reunification," American Economic Review, American Economic Association, vol. 94(3), pages 730-740, June. [Downloadable!]
  9. Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
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  10. Arulampalam, Wiji, 2001. "Is Unemployment Really Scarring? Effects of Unemployment Experiences on Wages," Economic Journal, Royal Economic Society, vol. 111(475), pages F585-606, November. [Downloadable!] (restricted)
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  11. Clark, Andrew E & Georgellis, Yannis & Sanfey, Peter, 2001. "Scarring: The Psychological Impact of Past Unemployment," Economica, London School of Economics and Political Science, vol. 68(270), pages 221-41, May. [Downloadable!] (restricted)
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  12. Chamberlain, Gary, 1980. "Analysis of Covariance with Qualitative Data," Review of Economic Studies, Blackwell Publishing, vol. 47(1), pages 225-38, January. [Downloadable!] (restricted)
  13. Bruce Headey & Mark Wooden, 2004. "The Effects of Wealth and Income on Subjective Well-Being and Ill-Being," The Economic Record, The Economic Society of Australia, vol. 80(s1), pages S24-S33, 09. [Downloadable!] (restricted)
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Cited by:
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  1. repec:ese:iserwp: is not listed on IDEAS
  2. Finbarr Brereton & J. Peter Clinch & Susana Ferreira, 2008. "Employment and Life-Satisfaction: Insights from Ireland," The Economic and Social Review, Economic and Social Studies, vol. 39(3), pages 207-234. [Downloadable!]
  3. Booth, Alison L & van Ours, Jan C, 2005. "Hours of Work and Gender Identity: Does Part-Time Work Make the Family Happier?," CEPR Discussion Papers 5438, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  4. David G. Blanchflower, 2008. "International evidence on well-being," NBER Working Papers 14318, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  5. Alison L. Booth & Jan C. van Ours, 2007. "Job Satisfaction and Family Happiness: The Part-time Work Puzzle," IZA Discussion Papers 3020, Institute for the Study of Labor (IZA). [Downloadable!]
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  6. Booth, A.L. & Ours, J.C. van, 2007. "Job Satisfaction And Family Happiness: The Part-Time Work Problem," Discussion Paper 2007-69, Tilburg University, Center for Economic Research. [Downloadable!]
  7. Colin P. Green & Gareth D. Leeves, 2009. "Scarring, Habituation and Social Exclusion: Work Histories in Secure and Insecure Employment," Discussion Papers Series 385, School of Economics, University of Queensland, Australia. [Downloadable!]
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