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Unemployment, retrospective error, and life satisfaction

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  • Hendrik Jürges

    ()
    (Munich Center for the Economics of Aging (MEA))

Abstract

I compare current and one-year retrospective data on unemployment in the German SOEP. 13 percent of all unemployment spells are not reported one year later, and another 7 percent are misreported. The ratio of retrospective to current unemployment (as a measure of unemployment salience) has increased in recent years and it is related to the loss in life satisfaction associated with unemployment. Individuals with weak labor force attachment, e.g. women with children or individuals close to retirement, have the largest propensity to underreport unemployment retrospectively. The data are consistent with evidence on retrospective bias found by cognitive psychologists and survey methodologists.

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Bibliographic Info

Paper provided by Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy in its series MEA discussion paper series with number 05089.

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Date of creation: 30 Jun 2005
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Handle: RePEc:mea:meawpa:05089

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Postal: Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy, Amalienstraße 33, 80799 München, Germany
Phone: +49/89/38602.442
Fax: +49/89/38602.490
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  1. Arulampalam, Wiji, 2001. "Is Unemployment Really Scarring? Effects of Unemployment Experiences on Wages," Economic Journal, Royal Economic Society, vol. 111(475), pages F585-606, November.
  2. repec:ese:iserwp:97-19 is not listed on IDEAS
  3. Akerlof, George A & Yellen, Janet L, 1985. "Unemployment through the Filter of Memory," The Quarterly Journal of Economics, MIT Press, vol. 100(3), pages 747-73, August.
  4. Andrew Clark, 2001. "Unemployment As A Social Norm: Psychological Evidence from Panel Data," DELTA Working Papers 2001-17, DELTA (Ecole normale supérieure).
  5. Gillian Paull, 2002. "Biases in the reporting of labour market dynamics," IFS Working Papers W02/10, Institute for Fiscal Studies.
  6. Hunt, Jennifer, 1995. "The Effect of Unemployment Compensation on Unemployment Duration in Germany," Journal of Labor Economics, University of Chicago Press, vol. 13(1), pages 88-120, January.
  7. Hujer, Reinhard & Schneider, Hilmar, 1989. "The analysis of labor market mobility using panel data," European Economic Review, Elsevier, vol. 33(2-3), pages 530-536, March.
  8. 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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