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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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  14. Andrew Clark & Andreas Knabe & Steffen Rätzel, 2008. "Boon or Bane?: Others' Unemployment, Well-Being and Job Insecurity," SOEPpapers on Multidisciplinary Panel Data Research 153, DIW Berlin, The German Socio-Economic Panel (SOEP).
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  21. Andreas Knabe & Steffen Rätzel, 2011. "Scarring or Scaring? The Psychological Impact of Past Unemployment and Future Unemployment Risk," Economica, London School of Economics and Political Science, vol. 78(310), pages 283-293, 04.
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Citations

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Cited by:
  1. Ronnie Schöb, 2012. "Unemployment and Identity," CESifo Working Paper Series 3991, CESifo Group Munich.
  2. Andrew E. Clark & Conchita D'Ambrosio & Simone Ghislandi, 2014. "Adaptation to Poverty in Long-Run Panel Data," PSE Working Papers halshs-00925542, HAL.
  3. Clemens Hetschko & Andreas Knabe & Ronnie Schöb, 2014. "Looking Back in Anger?: Retirement and Unemployment Scarring," SOEPpapers on Multidisciplinary Panel Data Research 652, DIW Berlin, The German Socio-Economic Panel (SOEP).
  4. repec:hal:wpaper:halshs-00925542 is not listed on IDEAS
  5. 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.
  6. 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).

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