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The externality cost of neighbour’s at work: Social norm induced effects on well-being

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Listed:
  • Howley, P.
  • Knight, S.

Abstract

This article tests for social-norm effects in labour market status. We extend previous research which has examined the relationship between aggregate unemployment and well-being as a mechanism for uncovering social-norm effects, by using a more spatially disaggregated (neighbourhood as opposed to regional) measure of unemployment. Our fixed effects regression results indicate that while unemployment hurts, it hurts much less when individuals live in neighbourhoods where the prevailing rate of unemployment is high. In keeping with the social-norm hypothesis, we also find that unemployment hurts less when individuals think of themselves as being similar to their neighbours.

Suggested Citation

  • Howley, P. & Knight, S., 2016. "The externality cost of neighbour’s at work: Social norm induced effects on well-being," Health, Econometrics and Data Group (HEDG) Working Papers 16/34, HEDG, c/o Department of Economics, University of York.
    • Handle: RePEc:yor:hectdg:16/34
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    References listed on IDEAS

    as
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    6. Rainer Winkelmann, 2014. "Unemployment and happiness," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-94, October.
    7. Daniel Oesch & Oliver Lipps, 2011. "Does Unemployment Hurt Less if There Is More of It Around?: A Panel Analysis of Life Satisfaction in Germany and Switzerland," SOEPpapers on Multidisciplinary Panel Data Research 393, DIW Berlin, The German Socio-Economic Panel (SOEP).
    8. Liliana Winkelmann & Rainer Winkelmann, 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.
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    More about this item

    Keywords

    social norms; unemployment; well-being;
    All these keywords.

    JEL classification:

    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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