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Changing Identity: Retiring from Unemployment

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Author Info

  • Clemens Hetschko
  • Andreas Knabe
  • Ronnie Schöb

Abstract

Using data from the German Socio-Economic Panel from 1984-2009, we follow persons from their working life into their retirement years and find that, on average, employed people maintain their life satisfaction upon retirement, while long-term unemployed people report a substantial increase in their life satisfaction when they retire. These results are robust to controlling for changes in other life circumstances and suggest that retiring is associated with a switch in the relevant social norms that causes an increase in identity utility for the formerly unemployed. This is supportive of the idea that, by including identity in the utility function, results from the empirical life satisfaction literature can be reconciled with the economic theory of individual utility.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2011/wp-cesifo-2011-07/cesifo1_wp3540.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3540.

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Date of creation: 2011
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Handle: RePEc:ces:ceswps:_3540

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Keywords: life satisfaction; retirement; unemployment; identity; social norm;

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References

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  1. Andreas Knabe & Steffen Rätzel, 2008. "Scarring or Scaring? The Psychological Impact of Past Unemployment and Future Unemployment Risk," FEMM Working Papers 08013, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
  2. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP) – Scope, Evolution and Enhancements," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 127(1), pages 139-169.
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  6. Clark, Andrew & Knabe, Andreas & Rätzel, Steffen, 2010. "Boon or bane? Others' unemployment, well-being and job insecurity," Labour Economics, Elsevier, vol. 17(1), pages 52-61, January.
  7. Andrew Clark, 2001. "Unemployment As A Social Norm: Psychological Evidence from Panel Data," DELTA Working Papers 2001-17, DELTA (Ecole normale supérieure).
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Cited by:
  1. repec:hal:wpaper:halshs-00925542 is not listed on IDEAS
  2. Hetschko, Clemens & Knabe, Andreas & Schöb, Ronnie, 2014. "Looking back in anger? Retirement and unemployment scarring," Discussion Papers 2014/11, Free University Berlin, School of Business & Economics.
  3. Ronnie Schöb, 2012. "Unemployment and Identity," CESifo Working Paper Series 3991, CESifo Group Munich.
  4. Filges, Trine & Larsen, Mona & Pedersen, Peder J., 2012. "Retirement: Does Individual Unemployment Matter? Evidence from Danish Panel Data 1980–2009," IZA Discussion Papers 6538, Institute for the Study of Labor (IZA).
  5. Andrew E. Clark & Conchita D´Ambrosio & Simone Ghislandi, 2014. "Adaptation to Poverty in Long-Run Panel Data," SOEPpapers on Multidisciplinary Panel Data Research 634, DIW Berlin, The German Socio-Economic Panel (SOEP).
  6. Rackow, Katja & Schupp, Jürgen & Scheve, Christian von, 2012. "Angst und Ärger: Zur Relevanz emotionaler Dimensionen sozialer Ungleichheit," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 392-409.

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