New measures of the costs of unemployment: Evidence from the subjective well-being of 2.3 million Americans
AbstractBy exploiting two very large samples of US subjective well-being data we are able to obtain comparable estimates of the monetary and other costs of unemployment on the unemployed themselves, while simultaneously estimating the effects of local employment on the subjective well-being of the rest of the population. For those who are unemployed, the subjective well-being consequences can be divided into income and non-income effects, with the latter being five times larger than the former. This is similar to what has been found in many countries, as is our finding that the non-income effects are lower for individuals living in areas of high unemployment. Most importantly, we are able to use the large sample size and variety of questions in the BRFSS and Gallup daily polls to reconcile, and extend to the United States, what had previously seemed to be contradictory results on the size and nature of the spillover effects of unemployment on subjective well-being. At the population level the spillover effects are twice as large as the direct effects, making the total well-being costs of unemployment fifteen times larger than those directly due to the lower incomes of the unemployed.
Download InfoIf 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.
Bibliographic InfoPaper provided by University of Alberta, Department of Economics in its series Working Papers with number 2011-3.
Length: 57 pages
Date of creation: 24 Feb 2011
Date of revision:
Find related papers by JEL classification:
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
- J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-03-12 (All new papers)
- NEP-HAP-2011-03-12 (Economics of Happiness)
- NEP-LAB-2011-03-12 (Labour Economics)
- NEP-MAC-2011-03-12 (Macroeconomics)
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.:
- Justin Wolfers, 2003.
"Is Business Cycle Volatility Costly? Evidence from Surveys of Subjective Wellbeing,"
NBER Working Papers
9619, National Bureau of Economic Research, Inc.
- Wolfers, Justin, 2003. "Is Business Cycle Volatility Costly? Evidence from Surveys of Subjective Well-Being," International Finance, Wiley Blackwell, Wiley Blackwell, vol. 6(1), pages 1-26, Spring.
- Wolfers, Justin, 2003. "Is Business Cycle Volatility Costly? Evidence from Surveys of Subjective Well-Being," Research Papers, Stanford University, Graduate School of Business 1751r, Stanford University, Graduate School of Business.
- Mavridis, Dimitris, 2010. "Can subjective well-being predict unemployment length ?," Policy Research Working Paper Series 5293, The World Bank.
- Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008.
"Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles,"
Journal of Economic Literature, American Economic Association,
American Economic Association, vol. 46(1), pages 95-144, March.
- 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).
- Andreas Knabe & Steffen Rätzel, 2007.
"Quantifying the psychological costs of unemployment: the role of permanent income,"
FEMM Working Papers
07012, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
- Andreas Knabe & Steffen Ratzel, 2011. "Quantifying the psychological costs of unemployment: the role of permanent income," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 43(21), pages 2751-2763.
- Andreas Knabe & Steffen Rätzel, 2007. "Quantifying the Psychological Costs of Unemployment: The Role of Permanent Income," SOEPpapers on Multidisciplinary Panel Data Research 32, DIW Berlin, The German Socio-Economic Panel (SOEP).
- Robert J. MacCulloch & Rafael Di Tella & Andrew J. Oswald, 2001.
"Preferences over Inflation and Unemployment: Evidence from Surveys of Happiness,"
American Economic Review, American Economic Association,
American Economic Association, vol. 91(1), pages 335-341, March.
- DiTella, Rafael & MacCulloch, Robert & Oswald, Andrew J., 2001. "Preferences over inflation and unemployment: Evidence from surveys of happiness," ZEI Working Papers, ZEI - Center for European Integration Studies, University of Bonn B 03-2001, ZEI - Center for European Integration Studies, University of Bonn.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- FED STUDY: We Conservatively Estimate That The Financial Crisis Cost Us Up To $14 Trillion
by Rob Wile in Business Insider on 2013-07-29 23:09:00
- Isilda Mara & Michael Landesmann, 2013.
"Do I stay because I am happy or am I happy because I stay? Life satisfaction in migration, and the decision to stay permanently, return and out-migrate,"
Norface Discussion Paper Series, Norface Research Programme on Migration, Department of Economics, University College London
2013008, Norface Research Programme on Migration, Department of Economics, University College London.
- Michael Landesmann & Isilda Mara, 2013. "Do I Stay because I am Happy or am I Happy because I Stay? Life Satisfaction in Migration, and the Decision to Stay Permanently, Return and Out-migrate," wiiw Working Papers, The Vienna Institute for International Economic Studies, wiiw 103, The Vienna Institute for International Economic Studies, wiiw.
- Krauss, Alexander & Graham, Carol, 2013. "Subjective wellbeing in Colombia : some insights on vulnerability, job security, and relative incomes," Policy Research Working Paper Series 6672, The World Bank.
- Abel Brodeur & Sarah Flèche, 2013.
"Where the Streets Have a Name: Income Comparisons in the US,"
PSE Working Papers, HAL
- Brodeur, Abel & Flèche, Sarah, 2013. "Where the Streets Have a Name: Income Comparisons in the US," IZA Discussion Papers 7256, Institute for the Study of Labor (IZA).
- Abel Brodeur & Sarah Flèche, 2013. "Where the streets have a name: income comparisons in the US," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 51529, London School of Economics and Political Science, LSE Library.
- Abel Brodeur & Sarah Flèche, 2013. "Where the Streets Have a Name: Income Comparisons in the US," CEP Discussion Papers, Centre for Economic Performance, LSE dp1196, Centre for Economic Performance, LSE.
- repec:hal:wpaper:halshs-00795198 is not listed on IDEAS
- Timothy J. Bartik, 2014. "How Effects of Local Labor Demand Shocks Vary with Local Labor Market Conditions," Upjohn Working Papers and Journal Articles, W.E. Upjohn Institute for Employment Research 14-202, W.E. Upjohn Institute for Employment Research.
- Timothy J. Bartik, 2013. "Social Costs of Jobs Lost Due to Environmental Regulations," Upjohn Working Papers and Journal Articles, W.E. Upjohn Institute for Employment Research 13-193, W.E. Upjohn Institute for Employment Research.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Brenda Carrier).
If references are entirely missing, you can add them using this form.