Advanced Search
MyIDEAS: Login to save this article or follow this journal

Why Does Unemployment Hurt the Employed?: Evidence from the Life Satisfaction Gap Between the Public and the Private Sector

Contents:

Author Info

  • Simon Luechinger
  • Stephan Meier
  • Alois Stutzer

Abstract

High unemployment rates entail substantial costs to the working population in terms of reduced subjective well-being. This paper studies the importance of individual economic security, in particular job security, by exploiting sector-specific institutional differences in the exposure to economic shocks. Public servants have stricter dismissal protection and face a lower risk of their organization becoming bankrupt than private sector employees. The empirical results from individual panel data for Germany and repeated cross-sectional data for the United States and Europe show that private sector employees’ subjective well-being reacts indeed much more sensitive to fluctuations in unemployment rates than public sector employees’.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://jhr.uwpress.org/cgi/reprint/45/4/998
Download Restriction: A subscripton is required to access pdf files. Pay per article is available.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by University of Wisconsin Press in its journal Journal of Human Resources.

Volume (Year): 45 (2010)
Issue (Month): 4 ()
Pages: 998-1045

as in new window
Handle: RePEc:uwp:jhriss:v:45:y:2010:i:4:p:998-1045

Contact details of provider:
Web page: http://jhr.uwpress.org/

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

References

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.:
as in new window
  1. Becchetti, Leonardo & Castriota, Stefano & Giuntella, Giovanni Osea, 2010. "The effects of age and job protection on the welfare costs of inflation and unemployment," European Journal of Political Economy, Elsevier, Elsevier, vol. 26(1), pages 137-146, March.
  2. DiTella, Rafael & MacCulloch, Robert & Oswald, Andrew J., 1999. "The macroeconomics of happiness," ZEI Working Papers, ZEI - Center for European Integration Studies, University of Bonn B 03-1999, ZEI - Center for European Integration Studies, University of Bonn.
  3. Andrew Clark, 2001. "Unemployment As A Social Norm: Psychological Evidence from Panel Data," DELTA Working Papers, DELTA (Ecole normale supérieure) 2001-17, DELTA (Ecole normale supérieure).
  4. David Card, 1995. "The Wage Curve: A Review," Working Papers, Princeton University, Department of Economics, Industrial Relations Section. 722, Princeton University, Department of Economics, Industrial Relations Section..
  5. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Juergen Schupp & Gert Wagner, 2005. "Individual Risk Attitudes: New Evidence from a Large, Representative, Experimentally-Validated Survey," Working Papers, The Field Experiments Website 2096, The Field Experiments Website.
  6. Simon Luechinger & Alois Stutzer & Rainer winkelmann, 2006. "The Happiness Gains From Sorting and Matching in the Labor Market," IEW - Working Papers, Institute for Empirical Research in Economics - University of Zurich 275, Institute for Empirical Research in Economics - University of Zurich.
  7. Falk, Armin & Zweimüller, Josef, 2005. "Unemployment and Right-Wing Extremist Crime," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4997, C.E.P.R. Discussion Papers.
  8. Andrew Clark & Fabien Postel-Vinay, 2009. "Job security and job protection," Oxford Economic Papers, Oxford University Press, vol. 61(2), pages 207-239, April.
  9. Robert B. Barsky & Miles S. Kimball & F. Thomas Juster & Matthew D. Shapiro, 1995. "Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Survey," NBER Working Papers 5213, National Bureau of Economic Research, Inc.
  10. Alan B. Krueger, 1988. "The determinants of queues for federal jobs," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, ILR Review, Cornell University, ILR School, vol. 41(4), pages 567-581, July.
  11. Nicola Fuchs-Schundeln & Matthias Schundeln, 2005. "Precautionary Savings and Self-Selection - Evidence from the German Reunification "Experiment"," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 2069, Harvard - Institute of Economic Research.
  12. Raphael, Steven & WINTER-EBMER, RUDOLF, 1998. "Identifying the Effect of Unemployment on Crime," University of California at San Diego, Economics Working Paper Series, Department of Economics, UC San Diego qt5hb4h56g, Department of Economics, UC San Diego.
  13. Alois Stutzer, 2008. "Bureaucratic Rents and Life Satisfaction," Journal of Law, Economics and Organization, Oxford University Press, Oxford University Press, vol. 24(2), pages 476-488, October.
  14. Alois Stutzer & Bruno S. Frey, 2004. "Reported Subjective Well-Being: A Challenge for Economic Theory and Economic Policy," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, Duncker & Humblot, Berlin, vol. 124(2), pages 191-231.
  15. Sanz-de-Galdeano, Anna & Turunen, Jarkko, 2006. "The euro area wage curve," Economics Letters, Elsevier, Elsevier, vol. 92(1), pages 93-98, July.
  16. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 104(424), pages 648-59, May.
  17. Wolfers, Justin, 2003. "Is Business Cycle Volatility Costly? Evidence from Surveys of Subjective Well-Being," Research Papers, Stanford University, Graduate School of Business 1751r, Stanford University, Graduate School of Business.
  18. Rafael Di Tella & Robert MacCulloch, 2005. "Partisan Social Happiness," Review of Economic Studies, Oxford University Press, vol. 72(2), pages 367-393.
  19. Stewart, M.B. & Swaffield, J.K., 1996. "Constraints on the Desired Hours of Work of British Men," The Warwick Economics Research Paper Series (TWERPS), University of Warwick, Department of Economics 468, University of Warwick, Department of Economics.
  20. Blanchflower, D. & Oswald, A., 1989. "The Wage Curve," Papers, London School of Economics - Centre for Labour Economics 340, London School of Economics - Centre for Labour Economics.
  21. Paul Frijters & John P. Haisken-DeNew & Michael A. Shields, 2004. "Investigating the Patterns and Determinants of Life Satisfaction in Germany Following Reunification," Journal of Human Resources, University of Wisconsin Press, University of Wisconsin Press, vol. 39(3).
  22. Anna Öster & Jonas Agell, 2007. "Crime and Unemployment in Turbulent Times," Journal of the European Economic Association, MIT Press, MIT Press, vol. 5(4), pages 752-775, 06.
  23. Barsky, Robert B, et al, 1997. "Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Study," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 112(2), pages 537-79, May.
  24. Richard B. Freeman, 1987. "How Do Public Sector Wages and Employment Respond to Economic Conditions?," NBER Chapters, National Bureau of Economic Research, Inc, in: Public Sector Payrolls, pages 183-216 National Bureau of Economic Research, Inc.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:uwp:jhriss:v:45:y:2010:i:4:p:998-1045. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.