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Neighborhood effects of high unemployment rates: Welfare implications among different social groups

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  • Schwarz, Peter

Abstract

This study analyzes spillover effects of high unemployment rates on well-being using cross-sectional data for Germany. Context effects among the employed arise due to the informational character of high unemployment rates. Using data on job security perceptions as well as regional unemployment rates the paper shows that high unemployment rates cause negative externalities among the employed. In addition, subjective perceptions of job security depend on local labor market conditions indicating the informational value of employment data. For unemployed persons we cannot find any welfare gains owing to a social norm effect. Thus, the existence of a public bad is not more enjoyable the more people suffer from the public bad.

Suggested Citation

  • Schwarz, Peter, 2012. "Neighborhood effects of high unemployment rates: Welfare implications among different social groups," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(2), pages 180-188.
    • Handle: RePEc:eee:soceco:v:41:y:2012:i:2:p:180-188
    DOI: 10.1016/j.socec.2011.12.006
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    7. George Grekousis, 2018. "Further Widening or Bridging the Gap? A Cross-Regional Study of Unemployment across the EU Amid Economic Crisis," Sustainability, MDPI, vol. 10(6), pages 1-18, May.
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    More about this item

    Keywords

    Unemployment; Spillover effects; Well-being; Job insecurity;
    All these keywords.

    JEL classification:

    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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