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Unpacking the misery multiplier: How employability modifies the impacts of unemployment and job insecurity on life satisfaction and mental health

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  • Green, Francis

Abstract

Employability strongly moderates the effects of unemployment and of job insecurity on life satisfaction and mental health. Using nationally representative panel data from Australia, I find that an increase in employability from zero to 100% cancels around three quarters, in some cases more, of the detrimental effect of unemployment. Employability also matters for employees: an increase in men's employability from zero to 100% reduces the detrimental effect of job insecurity by more than half. The effects of extreme job insecurity and of unemployment are large and of comparable magnitudes. The findings are used to compute estimates of the well-being trade-off between increases in job insecurity and increases in employability, relevant to the support of "flexicurity" policies, and of the "misery multiplier", the extent to which the effect of a rise in aggregate unemployment on those becoming unemployed is supplemented by the effects on others' insecurity and employability.

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  • Green, Francis, 2011. "Unpacking the misery multiplier: How employability modifies the impacts of unemployment and job insecurity on life satisfaction and mental health," Journal of Health Economics, Elsevier, vol. 30(2), pages 265-276, March.
  • Handle: RePEc:eee:jhecon:v:30:y:2011:i:2:p:265-276
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