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Life Satisfaction and Unemployment: The Role of Voluntariness and Job Prospects

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  • André Hajek
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    Abstract

    By using longitudinal data the relation between satisfaction with life and unemployment is analyzed in this study. Data used in this publication were made available by the German Socio Economic Panel Study (SOEP) at the German Institute for Economic Research (DIW Berlin), Berlin. A period from 1998-2009 is evaluated. This publication has two goals. (1) To estimate the effects of voluntary and involuntary unemployment on life satisfaction. (2) Moreover, the intent is to answer the question of whether job prospects influence life satisfaction. This study has yielded the following results: In contrast to voluntary job leavings involuntary job leavings noticeable reduce satisfaction. Furthermore, a lack of job prospects before leaving the last position decreases life satisfaction as well. Additionally, an exogenous stimulus (plant shutdown) diminishes satisfaction, especially those of men. The implications are discussed.

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    File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.431281.de/diw_sp0601.pdf
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    Bibliographic Info

    Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 601.

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    Length: VI, 11 p.
    Date of creation: 2013
    Date of revision:
    Handle: RePEc:diw:diwsop:diw_sp601

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    Keywords: Life satisfaction; unemployment; SOEP; fixed-effects; job prospects; voluntariness;

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    1. 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).
    2. SonjaC. Kassenboehmer & JohnP. Haisken-DeNew, 2009. "You're Fired! The Causal Negative Effect of Entry Unemployment on Life Satisfaction," Economic Journal, Royal Economic Society, vol. 119(536), pages 448-462, 03.
    3. Jan Marcus;, 2012. "The effect of unemployment on the mental health of spouses - Evidence from plant closures in Germany," Health, Econometrics and Data Group (HEDG) Working Papers 12/17, HEDG, c/o Department of Economics, University of York.
    4. Nattavudh Powdthavee, . "Jobless, Friendless, and Broke: What Happens to Different Areas of Life Before and After Unemployment?," Discussion Papers 09/15, Department of Economics, University of York.
    5. Ada Ferrer-i-Carbonell & Paul Frijters, 2002. "How important is Methodology for the Estimates of the Determinants of Happiness?," Tinbergen Institute Discussion Papers 02-024/3, Tinbergen Institute.
    6. Winkelmann, Liliana & Winkelmann, Rainer, 1998. "Why Are the Unemployed So Unhappy? Evidence from Panel Data," Economica, London School of Economics and Political Science, vol. 65(257), pages 1-15, February.
    7. Chamberlain, Gary, 1980. "Analysis of Covariance with Qualitative Data," Review of Economic Studies, Wiley Blackwell, vol. 47(1), pages 225-38, January.
    8. James H. Stock & Mark W. Watson, 2008. "Heteroskedasticity-Robust Standard Errors for Fixed Effects Panel Data Regression," Econometrica, Econometric Society, vol. 76(1), pages 155-174, 01.
    9. Schmitz, Hendrik, 2011. "Why are the unemployed in worse health? The causal effect of unemployment on health," Labour Economics, Elsevier, vol. 18(1), pages 71-78, January.
    10. Jan Marcus, 2012. "Does Job Loss Make You Smoke and Gain Weight?," SOEPpapers on Multidisciplinary Panel Data Research 432, DIW Berlin, The German Socio-Economic Panel (SOEP).
    11. Baetschmann, Gregori & Staub, Kevin & Winkelmann, Rainer, 2011. "Consistent Estimation of the Fixed Effects Ordered Logit Model," IZA Discussion Papers 5443, Institute for the Study of Labor (IZA).
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