According to set-point theories of subjective well-being, people react to events, but then return to initial levels of happiness and satisfaction over time. We test this idea by examining reaction and adaptation to unemployment in a 15-year longitudinal study. In accordance with set-point theory, individuals first reacted strongly to unemployment and then shifted back toward their former (or “baseline”) levels of life satisfaction. However, on average, individuals did not completely return to their former levels of life satisfaction, even after they became re-employed. The findings suggests that even a short period of unemployment can cause an alteration in a person’s long-term set-point. Within-person analyses showed, however, that there are considerable individual differences in reaction and adaptation to unemployment. Although there was substantial stability in life satisfaction over the years, unemployment did influence long-term levels, thus suggesting that in addition to personality, long-term subjective well-being can also be influenced by life circumstances.
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Paper provided by Economics and Finance Section, School of Social Sciences, Brunel University in its series Economics and Finance Discussion Papers with number
02-16.
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.:
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.
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Clark, Andrew E & Oswald, Andrew J, 1994.
"Unhappiness and Unemployment,"
Economic Journal,
Royal Economic Society, vol. 104(424), pages 648-59, May.
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