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New Measures Of The Costs Of Unemployment: Evidence From The Subjective Well-Being Of 3.3 Million Americans

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  • JOHN F. HELLIWELL
  • HAIFANG HUANG

Abstract

type="main" xml:id="ecin12093-abs-0001"> Using two large U.S. surveys, we estimate the effects of unemployment on the subjective well-being (SWB) of the unemployed and the rest of the population. For the unemployed, the nonpecuniary costs of unemployment are several times as large as those resulting from lower incomes, while the indirect effect at the population level is 15 times as large. For those who are still employed, a one percentage point increase in local unemployment has an impact on well-being roughly equivalent to a 4% decline in household income. We also find evidence indicating that job security is an important channel for the indirect effects of unemployment. ( JEL E24, H23, J64, J68)

Suggested Citation

  • John F. Helliwell & Haifang Huang, 2014. "New Measures Of The Costs Of Unemployment: Evidence From The Subjective Well-Being Of 3.3 Million Americans," Economic Inquiry, Western Economic Association International, vol. 52(4), pages 1485-1502, October.
  • Handle: RePEc:bla:ecinqu:v:52:y:2014:i:4:p:1485-1502
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. John V Winters & Yu Li, 2017. "Urbanisation, natural amenities and subjective well-being: Evidence from US counties," Urban Studies, Urban Studies Journal Limited, vol. 54(8), pages 1956-1973, June.
    2. Lars Osberg, 2011. "Why Did Unemployment Disappear from Official Macro-Economic Policy Discourse in Canada?," New Directions for Intelligent Government in Canada: Papers in Honour of Ian Stewart,in: Fred Gorbet & Andrew Sharpe (ed.), New Directions for Intelligent Government in Canada: Papers in Honour of Ian Stewart, pages 127-162 Centre for the Study of Living Standards.
    3. Abel Brodeur & Sarah Flèche, 2017. "Neighbors' Income, Public Goods and Well-Being," Working Papers 1719E, University of Ottawa, Department of Economics.
    4. John F. Helliwell & Lara B. Aknin & Hugh Shiplett & Haifang Huang & Shun Wang, 2017. "Social Capital and Prosocial Behaviour as Sources of Well-Being," NBER Working Papers 23761, National Bureau of Economic Research, Inc.
    5. John F. Helliwell, 2014. "Understanding and improving the social context of well-being," Chapters,in: Well-Being and Beyond, chapter 5, pages 125-143 Edward Elgar Publishing.
    6. Reichert, Arndt R. & Tauchmann, Harald, 2017. "Workforce reduction, subjective job insecurity, and mental health," Journal of Economic Behavior & Organization, Elsevier, vol. 133(C), pages 187-212.
    7. Jan-Emmanuel De Neve & George Ward, 2017. "Happiness at Work," CEP Discussion Papers dp1474, Centre for Economic Performance, LSE.
    8. repec:bla:revinw:v:65:y:2019:i:2:p:217-238 is not listed on IDEAS
    9. John F. Helliwell, 2011. "How Can Subjective Well-being Be Improved?," New Directions for Intelligent Government in Canada: Papers in Honour of Ian Stewart,in: Fred Gorbet & Andrew Sharpe (ed.), New Directions for Intelligent Government in Canada: Papers in Honour of Ian Stewart, pages 283-304 Centre for the Study of Living Standards.
    10. Odermatt, Reto & Stutzer, Alois, 2017. "Subjective Well-Being and Public Policy," IZA Discussion Papers 11102, Institute of Labor Economics (IZA).
    11. repec:spr:jhappi:v:19:y:2018:i:8:d:10.1007_s10902-017-9928-0 is not listed on IDEAS
    12. Abel Brodeur & Sarah Flèche, 2013. "Where the Streets Have a Name: Income Comparisons in the US," CEP Discussion Papers dp1196, Centre for Economic Performance, LSE.
    13. repec:taf:applec:v:50:y:2018:i:28:p:3029-3038 is not listed on IDEAS
    14. 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 103, The Vienna Institute for International Economic Studies, wiiw.
    15. Brady P. Horn & Johanna Catherine Maclean & Michael R. Strain, 2017. "Do Minimum Wage Increases Influence Worker Health?," Economic Inquiry, Western Economic Association International, vol. 55(4), pages 1986-2007, October.
    16. repec:bla:revinw:v:64:y:2018:i:2:p:406-427 is not listed on IDEAS
    17. Timothy J. Bartik, 2013. "Social Costs of Jobs Lost Due to Environmental Regulations," Upjohn Working Papers and Journal Articles 13-193, W.E. Upjohn Institute for Employment Research.
    18. Yasar, Rusen, 2017. "Subjective well-being and income: A compromise between Easterlin paradox and its critiques," Economics Discussion Papers 2017-113, Kiel Institute for the World Economy (IfW).
    19. Borgschulte, Mark & Martorell, Paco, 2016. "Paying to Avoid Recession: Using Reenlistment to Estimate the Cost of Unemployment," IZA Discussion Papers 9680, Institute of Labor Economics (IZA).
    20. Emilio Colombo & Valentina Rotondi & Luca Stanca, 2018. "Macroeconomic conditions and well-being: do social interactions matter?," Applied Economics, Taylor & Francis Journals, vol. 50(28), pages 3029-3038, June.
    21. Zhang, Yinjunjie & Xu, Zhicheng Phil & Palma, Marco A., 2017. "Misclassification Errors of Subjective Well-being: A New Approach to Mapping Happiness," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258553, Agricultural and Applied Economics Association.
    22. De Neve, Jan-Emmanuel & Ward, George, 2017. "Happiness at work," LSE Research Online Documents on Economics 83604, London School of Economics and Political Science, LSE Library.
    23. Abel Brodeur & Sarah Flèche, 2013. "Where the Streets Have a Name: Income Comparisons in the US," Working Papers halshs-00795198, HAL.
    24. Atkinson, Tyler & Luttrell, David & Rosenblum, Harvey, 2013. "How bad was it? The costs and consequences of the 2007–09 financial crisis," Staff Papers, Federal Reserve Bank of Dallas, issue Jul.

    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • 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

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