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How to Distinguish Voluntary from Involuntary Unemployment: On the Relationship between the Willingness to Work and Unemployment-Induced Unhappiness

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  • Adrian Chadi

Abstract

Studies investigating the determinants of happiness show that unemployment causes high distress for most affected persons. Researchers conclude that the amount of this disutility demonstrates the involuntariness of unemployment. This paper applies the happiness research approach to German panel data in order to revive the underlying economic question of whether unemployment is voluntary or involuntary. Accordingly, the decline in life satisfaction associated with unemployment is related to the willingness to work. The results of the econometric investigation indicate a very strong connection between unemployment-induced disutility and willingness to work, so that it is possible to divide unemployed individuals into certain categories, according to the potential voluntariness of unemployment. While there is a minority which can truly be regarded as voluntarily unemployed, most unemployed people actively search for work and suffer far more from unemployment than indicated by previous happiness research studies. A subsequent discussion includes a critical juxtaposition of the findings with policies such as the recent German labour market reforms. Copyright � 2010 Blackwell Publishing Ltd.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Kyklos.

Volume (Year): 63 (2010)
Issue (Month): 3 (08)
Pages: 317-329

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Handle: RePEc:bla:kyklos:v:63:y:2010:i:3:p:317-329

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0023-5962

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Cited by:
  1. Chadi, Adrian, 2011. "Regional unemployment and norm-induced effects on life satisfaction," CAWM Discussion Papers 47, Center of Applied Economic Research Münster (CAWM), University of Münster.
  2. Adrian Chadi, 2012. "Employed But Still Unhappy? On the Relevance of the Social Work Norm," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 132(1), pages 1-26.
  3. Peter Meer, 2014. "Gender, Unemployment and Subjective Well-Being: Why Being Unemployed Is Worse for Men than for Women," Social Indicators Research, Springer, vol. 115(1), pages 23-44, January.

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