Advanced Search
MyIDEAS: Login to save this paper or follow this series

You Don't Know What You've Got till It's Gone!: Unemployment and Intertemporal Changes in Self-Reported Life Satisfaction

Contents:

Author Info

  • Marcus Klemm

Abstract

This paper uses concurrently and - for the first time - retrospectively reported life satisfaction from the 1984 to 1987 waves of the German Socio-Economic Panel to study the importance of different comparison standards for the empirical correlation of unemployment and subjective life satisfaction. It is found that unemployed individuals do not only report significantly lower concurrent satisfaction, but also recall reduced satisfaction from past unemployment well, and retrospectively upgrade their past satisfaction scores. Therefore, the short-term negative effects of unemployment on individual life satisfaction reported in the literature so far are likely underestimated. At the same time, the empirical findings cast doubts on the usefulness of subjective life satisfaction for the precise quantification of welfare effects because of changing comparison standards which greatly limit the intertemporal comparability of the data. For this reason, such data also appear to be of limited use for monitoring long-term economic or social development.

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://www.diw.de/documents/publikationen/73/diw_01.c.390637.de/diw_sp0421.pdf
Download Restriction: no

Bibliographic Info

Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 421.

as in new window
Length: 30 p.
Date of creation: 2011
Date of revision:
Handle: RePEc:diw:diwsop:diw_sp421

Contact details of provider:
Postal: Mohrenstraße 58, D-10117 Berlin
Phone: xx49-30-89789-671
Fax: xx49-30-89789-109
Email:
Web page: http://www.diw.de/en/soep
More information through EDIRC

Related research

Keywords: Life satisfaction; well-being; unemployment; longitudinal and retrospective studies;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

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. Andrew Clark & Andreas Knabe & Steffen Rätzel, 2009. "Unemployment as a Social Norm in Germany," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, Duncker & Humblot, Berlin, vol. 129(2), pages 251-260.
  2. John Gibson & Bonggeun Kim, 2010. "Non-Classical Measurement Error in Long-Term Retrospective Recall Surveys," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, Department of Economics, University of Oxford, vol. 72(5), pages 687-695, October.
  3. Andrew E. Clark & Ed Diener & Yannis Georgellis & Richard E. Lucas, 2007. "Lags and Leads in Life Satisfaction: A Test of the Baseline Hypothesis," CEP Discussion Papers, Centre for Economic Performance, LSE dp0836, Centre for Economic Performance, LSE.
  4. Dolan, Paul & Peasgood, Tessa & White, Mathew, 2008. "Do we really know what makes us happy A review of the economic literature on the factors associated with subjective well-being," Journal of Economic Psychology, Elsevier, Elsevier, vol. 29(1), pages 94-122, February.
  5. John P. Haisken-DeNew & Markus H. Hahn, 2010. "PanelWhiz: Efficient Data Extraction of Complex Panel Data Sets - An Example Using the German SOEP," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, Duncker & Humblot, Berlin, vol. 130(4), pages 643-654.
  6. Angus S. Deaton, 2011. "The Financial Crisis and the Well-Being of Americans," NBER Working Papers 17128, National Bureau of Economic Research, Inc.
  7. Nick Carroll, 2007. "Unemployment and Psychological Well-being," The Economic Record, The Economic Society of Australia, The Economic Society of Australia, vol. 83(262), pages 287-302, 09.
  8. Bruno S. Frey & Alois Stutzer, . "What can Economists Learn from Happiness Research?," IEW - Working Papers, Institute for Empirical Research in Economics - University of Zurich 080, Institute for Empirical Research in Economics - University of Zurich.
  9. Senik, Claudia, 2009. "Direct evidence on income comparisons and their welfare effects," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 72(1), pages 408-424, October.
  10. Baetschmann, Gregori & Staub, Kevin E. & Winkelmann, Rainer, 2011. "Consistent Estimation of the Fixed Effects Ordered Logit Model," IZA Discussion Papers 5443, Institute for the Study of Labor (IZA).
  11. Gerlach, Knut & Stephan, Gesine, 1996. "A paper on unhappiness and unemployment in Germany," Economics Letters, Elsevier, Elsevier, vol. 52(3), pages 325-330, September.
  12. Rafael Di Tella & Robert MacCulloch, 2006. "Some Uses of Happiness Data in Economics," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 20(1), pages 25-46, Winter.
  13. Ada Ferrer-i-Carbonell & Paul Frijters, 2002. "How important is Methodology for the Estimates of the Determinants of Happiness?," Tinbergen Institute Discussion Papers, Tinbergen Institute 02-024/3, Tinbergen Institute.
  14. Clark, Andrew E. & Frijters, Paul & Shields, Michael A., 2007. "Relative Income, Happiness and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," IZA Discussion Papers 2840, Institute for the Study of Labor (IZA).
  15. Paul Frijters & John P. Haisken-DeNew & Michael A. Shields, 2004. "Money Does Matter! Evidence from Increasing Real Income and Life Satisfaction in East Germany Following Reunification," American Economic Review, American Economic Association, American Economic Association, vol. 94(3), pages 730-740, June.
  16. H. Elizabeth Peters, 1988. "Retrospective Versus Panel Data in Analyzing Lifecycle Events," Journal of Human Resources, University of Wisconsin Press, vol. 23(4), pages 488-513.
  17. André Vanoli, 2010. "On the Report by the Commission on the Measurement of Economic Performance and Social Progress (2009)," Working Paper Series of the German Council for Social and Economic Data, German Council for Social and Economic Data (RatSWD) 162, German Council for Social and Economic Data (RatSWD).
  18. repec:got:cegedp:116 is not listed on IDEAS
  19. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP): Scope, Evolution and Enhancements," SOEPpapers on Multidisciplinary Panel Data Research 1, DIW Berlin, The German Socio-Economic Panel (SOEP).
  20. Anna Manzoni & Ruud Luijkx & Ruud Muffels, 2011. "Explaining differences in labour market transitions between panel and life-course data in West-Germany," Quality & Quantity: International Journal of Methodology, Springer, Springer, vol. 45(2), pages 241-261, February.
  21. Akerlof, George A & Yellen, Janet L, 1985. "Unemployment through the Filter of Memory," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 100(3), pages 747-73, August.
  22. Abigail Barr, 2010. "Revisiting Michael McBride’s experiment about “Money, happiness, and aspirations”," Discussion Papers, University of Oxford, Nuffield College 2010003, University of Oxford, Nuffield College.
  23. Stefan Boes & Rainer Winkelmann, 2010. "The Effect of Income on General Life Satisfaction and Dissatisfaction," Social Indicators Research, Springer, Springer, vol. 95(1), pages 111-128, January.
  24. Schwartz, Carolyn E. & Sprangers, Mirjam A. G., 1999. "Methodological approaches for assessing response shift in longitudinal health-related quality-of-life research," Social Science & Medicine, Elsevier, Elsevier, vol. 48(11), pages 1531-1548, June.
  25. Geishecker, Ingo & Riedl, Maximilian, 2012. "Ordered response models and non-random personality traits: Monte Carlo simulations and a practical guide," Center for European, Governance and Economic Development Research Discussion Papers 116, University of Goettingen, Department of Economics.
  26. Paul Frijters & Harry Greenwell & John P. Haisken-DeNew & Michael A. Shields, 2009. "How well do individuals predict their future life satisfaction? Evidence from panel data following a nationwide exogenous shock," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 42(4), pages 1326-1346, November.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is featured on the following reading lists or Wikipedia pages:
  1. SOEP based publications

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:diw:diwsop:diw_sp421. 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: (Bibliothek).

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.