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Looking back in anger? Retirement and unemployment scarring

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  • Hetschko, Clemens
  • Knabe, Andreas
  • Schöb, Ronnie

Abstract

Previous studies find that past unemployment reduces life satisfaction even after reemployment for non-monetary reasons (unemployment scarring). It is not clear, however, whether this scarring is only caused by employment-related factors, such as worsened working conditions, or increased future uncertainty as regards income and employment. Using German panel data, we identify non-employment-related scarring by examining the transition of unemployed people to retirement as a life event after which employment-related scarring does not matter anymore. We find evidence for non-employment-related non-monetary unemployment scarring for people who were unemployed for the first time in their life directly prior to retirement, but not for people with earlier unemployment experiences. --

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Bibliographic Info

Paper provided by Free University Berlin, School of Business & Economics in its series Discussion Papers with number 2014/11.

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Date of creation: 2014
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Handle: RePEc:zbw:fubsbe:201411

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Keywords: unemployment scarring; life satisfaction; retirement;

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  1. Alois Stutzer & Rafael Lalive, 2004. "The Role of Social Work Norms in Job Searching and Subjective Well-Being," Journal of the European Economic Association, MIT Press, vol. 2(4), pages 696-719, 06.
  2. Bonsang, Eric & Klein, Tobias J., 2012. "Retirement and subjective well-being," Journal of Economic Behavior & Organization, Elsevier, vol. 83(3), pages 311-329.
  3. Hetschko, Clemens & Knabe, Andreas & Schöb, Ronnie, 2011. "Changing identity: Retiring from unemployment," Discussion Papers 2011/11, Free University Berlin, School of Business & Economics.
  4. Andreas Knabe & Steffen Rätzel, 2011. "Scarring or Scaring? The Psychological Impact of Past Unemployment and Future Unemployment Risk," Economica, London School of Economics and Political Science, vol. 78(310), pages 283-293, 04.
  5. Blanchflower, David G. & Oswald, Andrew J., 2004. "Well-being over time in Britain and the USA," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1359-1386, July.
  6. 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).
  7. Andrew Clark, 2001. "Unemployment As A Social Norm: Psychological Evidence from Panel Data," DELTA Working Papers 2001-17, DELTA (Ecole normale supérieure).
  8. 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.
  9. Daly, M. & Delaney, L., 2013. "The scarring effect of unemployment throughout adulthood on psychological distress at age 50: Estimates controlling for early adulthood distress and childhood psychological factors," Social Science & Medicine, Elsevier, vol. 80(C), pages 19-23.
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