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Unemployment and Psychological Well-being

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  • NICK CARROLL

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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  1. 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, Elsevier, vol. 17(2), pages 183-220, April.
  2. Andrew E. Clark, 2003. "Unemployment as a Social Norm: Psychological Evidence from Panel Data," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 21(2), pages 289-322, April.
  3. 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.
  4. David G. Blanchflower & Andrew J. Oswald, 2000. "Well-Being Over Time in Britain and the USA," NBER Working Papers 7487, National Bureau of Economic Research, Inc.
  5. Winkelmann, Liliana & Winkelmann, Rainer, 1998. "Why Are the Unemployed So Unhappy? Evidence from Panel Data," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 65(257), pages 1-15, February.
  6. Ada Ferrer-i-Carbonell & Paul Frijters, 2002. "How important is Methodology for the Estimates of the Determinants of Happiness?," Tinbergen Institute Discussion Papers 02-024/3, Tinbergen Institute.
  7. Chamberlain, Gary, 1980. "Analysis of Covariance with Qualitative Data," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 47(1), pages 225-38, January.
  8. Pissarides, Christopher A, 1992. "Loss of Skill during Unemployment and the Persistence of Employment Shocks," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 107(4), pages 1371-91, November.
  9. Akerlof, George A, 1980. "A Theory of Social Custom, of Which Unemployment May be One Consequence," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 94(4), pages 749-75, June.
  10. Gary Marks & Nicole Fleming, 1999. "Influences and Consequences of Well-being Among Australian Young People: 1980–1995," Social Indicators Research, Springer, Springer, vol. 46(3), pages 301-323, March.
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  1. The pretence of knowledge
    by chris dillow in Stumbling and Mumbling on 2010-09-10 12:40:40
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