IDEAS home Printed from https://ideas.repec.org/a/spr/jhappi/v22y2021i4d10.1007_s10902-020-00297-7.html
   My bibliography  Save this article

Hartz and Minds: Happiness Effects of Reforming an Employment Agency

Author

Listed:
  • Max Deter

    (Bergische Universität Wuppertal)

Abstract

Since the labor market reforms around 2005, known as the Hartz reforms, Germany has experienced declining unemployment rates. However, little is known about the reforms’ effect on individual life satisfaction of unemployed workers. This study applies difference-in-difference estimations and finds a decrease in life satisfaction after the reforms that is more pronounced for male unemployed in west Germany. The effect is driven by income and income satisfaction, but not by the unemployment rate. Also unemployed persons who exogenously lost their jobs are affected by the reforms. In line with the structure of the reforms, the effect is stronger on long-term and involuntarily unemployed persons.

Suggested Citation

  • Max Deter, 2021. "Hartz and Minds: Happiness Effects of Reforming an Employment Agency," Journal of Happiness Studies, Springer, vol. 22(4), pages 1819-1838, April.
  • Handle: RePEc:spr:jhappi:v:22:y:2021:i:4:d:10.1007_s10902-020-00297-7
    DOI: 10.1007/s10902-020-00297-7
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10902-020-00297-7
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s10902-020-00297-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde, 2012. "The Intergenerational Transmission of Risk and Trust Attitudes," Review of Economic Studies, Oxford University Press, vol. 79(2), pages 645-677.
    2. Oswald, Andrew J, 1997. "Happiness and Economic Performance," Economic Journal, Royal Economic Society, vol. 107(445), pages 1815-1831, November.
    3. Hochmuth, Brigitte & Kohlbrecher, Britta & Merkl, Christian & Gartner, Hermann, 2021. "Hartz IV and the decline of German unemployment: A macroeconomic evaluation," Journal of Economic Dynamics and Control, Elsevier, vol. 127(C).
    4. Bruce Headey & Jonathan Kelley & Alex Wearing, 1993. "Dimensions of mental health: Life satisfaction, positive affect, anxiety and depression," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 29(1), pages 63-82, May.
    5. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008. "Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 95-144, March.
    6. Andrew E. Clark, 2003. "Unemployment as a Social Norm: Psychological Evidence from Panel Data," Journal of Labor Economics, University of Chicago Press, vol. 21(2), pages 289-322, April.
    7. Fabian Kosse & Thomas Deckers & Pia Pinger & Hannah Schildberg-Hörisch & Armin Falk, 2020. "The Formation of Prosociality: Causal Evidence on the Role of Social Environment," Journal of Political Economy, University of Chicago Press, vol. 128(2), pages 434-467.
    8. Kettner, Anja & Rebien, Martina, 2007. "Hartz-IV-Reform: Impulse für den Arbeitsmarkt," IAB-Kurzbericht 200719, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    9. Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
    10. Krause, Michael U. & Uhlig, Harald, 2012. "Transitions in the German labor market: Structure and crisis," Journal of Monetary Economics, Elsevier, vol. 59(1), pages 64-79.
    11. Stefan Arent & Wolfgang Nagl, 2011. "Unemployment Benefit and Wages: The Impact of the Labor Market Reform in Germany on (Reservation) Wages," ifo Working Paper Series 101, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    12. R. Veenhoven, 2008. "Healthy happiness: effects of happiness on physical health and the consequences for preventive health care," Journal of Happiness Studies, Springer, vol. 9(3), pages 449-469, September.
    13. Alesina, Alberto & Di Tella, Rafael & MacCulloch, Robert, 2004. "Inequality and happiness: are Europeans and Americans different?," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2009-2042, August.
    14. Jonathan Gruber & Sendhil Mullainathan, 2006. "Do Cigarette Taxes Make Smokers Happier?," Palgrave Macmillan Books, in: Yew-Kwang Ng & Lok Sang Ho (ed.), Happiness and Public Policy, chapter 6, pages 109-146, Palgrave Macmillan.
    15. Anne C. Gielen & Jan C. Ours, 2014. "Unhappiness and Job Finding," Economica, London School of Economics and Political Science, vol. 81(323), pages 544-565, July.
    16. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, July.
    17. Dolan, Paul & Peasgood, Tessa & White, Mathew, 2008. "Do we really know what makes us happy A review of the economic literature on the factors associated with subjective well-being," Journal of Economic Psychology, Elsevier, vol. 29(1), pages 94-122, February.
    18. Jan Goebel & Maria Richter, 2007. "Nach der Einführung von Arbeitslosengeld II: deutlich mehr Verlierer als Gewinner unter den Hilfeempfängern," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 74(50), pages 753-761.
    19. Bernhard Boockmann & Stephan Thomsen & Thomas Walter, 2009. "Intensifying the Use of Benefit Sanctions – An Effective Tool to Shorten Welfare Receipt and Speed up Transitions to Employment?," IAW Discussion Papers 56, Institut für Angewandte Wirtschaftsforschung (IAW).
    20. Matthias S. Hertweck & Oliver Sigrist, 2012. "The Aggregate Effects of the Hartz Reforms in Germany," Working Paper Series of the Department of Economics, University of Konstanz 2012-38, Department of Economics, University of Konstanz.
    21. Eggs, Johannes, 2013. "Unemployment benefit II, unemployment and health," IAB-Discussion Paper 201312, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    22. Gardner, Jonathan & Oswald, Andrew J., 2007. "Money and mental wellbeing: A longitudinal study of medium-sized lottery wins," Journal of Health Economics, Elsevier, vol. 26(1), pages 49-60, January.
    23. Max Deter, 2020. "Prosociality and Risk Preferences in the Financial Sector," SOEPpapers on Multidisciplinary Panel Data Research 1075, DIW Berlin, The German Socio-Economic Panel (SOEP).
    24. Collischon, Matthias & Eberl, Andreas & Jahn, Kerstin, 2018. "The effect of compulsory service on life satisfaction and its channels," IAB-Discussion Paper 201824, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    25. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008. "Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 95-144, March.
    26. Eva M. Berger, 2010. "The Chernobyl Disaster, Concern about the Environment, and Life Satisfaction," Kyklos, Wiley Blackwell, vol. 63(1), pages 1-8, February.
    27. Ferrer-i-Carbonell, Ada, 2005. "Income and well-being: an empirical analysis of the comparison income effect," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 997-1019, June.
    28. Adrian Chadi, 2010. "How to Distinguish Voluntary from Involuntary Unemployment: On the Relationship between the Willingness to Work and Unemployment‐Induced Unhappiness," Kyklos, Wiley Blackwell, vol. 63(3), pages 317-329, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Trinh, Nhat An, 2021. "The effect of social benefit reform on educational inequality," SocArXiv kpxhf, Center for Open Science.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Martin Binder & Tom Broekel, 2012. "Happiness No Matter the Cost? An Examination on How Efficiently Individuals Reach Their Happiness Levels," Journal of Happiness Studies, Springer, vol. 13(4), pages 621-645, August.
    2. Di Tella, Rafael & Haisken-De New, John & MacCulloch, Robert, 2010. "Happiness adaptation to income and to status in an individual panel," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 834-852, December.
    3. Roberta Distante, 2013. "Subjective Well-Being, Income and Relative Concerns in the UK," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 113(1), pages 81-105, August.
    4. Byela Tibesigwa & Martine Visser & Brennan Hodkinson, 2016. "Effects of Objective and Subjective Income Comparisons on Subjective Wellbeing," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 128(1), pages 361-389, August.
    5. Levinson, Arik, 2012. "Valuing public goods using happiness data: The case of air quality," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 869-880.
    6. Maite Blázquez & Ana I. Moro Egido, 2020. "Financial insecurity and subjective well-being. Europe in crossnational perspective," ThE Papers 20/07, Department of Economic Theory and Economic History of the University of Granada..
    7. Andrew E. Clark, 2018. "Four Decades of the Economics of Happiness: Where Next?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 64(2), pages 245-269, June.
    8. Frijters, Paul & Beatton, Tony, 2012. "The mystery of the U-shaped relationship between happiness and age," Journal of Economic Behavior & Organization, Elsevier, vol. 82(2), pages 525-542.
    9. Alpaslan Akay & Corrado Giulietti & Juan Robalino & Klaus Zimmermann, 2014. "Remittances and well-being among rural-to-urban migrants in China," Review of Economics of the Household, Springer, vol. 12(3), pages 517-546, September.
    10. Nguyen, Ha & Duncan, Alan, 2015. "Macroeconomic fluctuations in home countries and immigrants’ well-being: New evidence from Down Under," MPRA Paper 69593, University Library of Munich, Germany, revised Feb 2016.
    11. Aguilar, Alexandra Cortés & García Muñoz, Teresa M. & Moro-Egido, Ana I., 2013. "Heterogeneous self-employment and satisfaction in Latin America," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 44-61.
    12. Korthals, R.A., 2012. "Selection and tracking in secondary education : a cross country analysis of student performance and educational opportunities," Research Memorandum 049, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    13. Robert Rudolf, 2014. "Work Shorter, Be Happier? Longitudinal Evidence from the Korean Five-Day Working Policy," Journal of Happiness Studies, Springer, vol. 15(5), pages 1139-1163, October.
    14. Chowdhury, Shyamal & Krause-Pilatus, Annabelle & Zimmermann, Klaus F., 2015. "Arsenic Contamination of Drinking Water and Mental Health," IZA Discussion Papers 9400, Institute of Labor Economics (IZA).
    15. Gibbons, Stephen & Silva, Olmo, 2011. "School quality, child wellbeing and parents' satisfaction," Economics of Education Review, Elsevier, vol. 30(2), pages 312-331, April.
    16. Miha Dominko & Miroslav Verbič, 2019. "The Economics of Subjective Well-Being: A Bibliometric Analysis," Journal of Happiness Studies, Springer, vol. 20(6), pages 1973-1994, August.
    17. Bahadır Dursun & Resul Cesur, 2016. "Transforming lives: the impact of compulsory schooling on hope and happiness," Journal of Population Economics, Springer;European Society for Population Economics, vol. 29(3), pages 911-956, July.
    18. Montizaan, Raymond M. & Vendrik, Maarten C.M., 2014. "Misery Loves Company: Exogenous shocks in retirement expectations and social comparison effects on subjective well-being," Journal of Economic Behavior & Organization, Elsevier, vol. 97(C), pages 1-26.
    19. Duha T. Altindag & Junyue Xu, 2009. "The Impact of Institutions and Development on Happiness," Departmental Working Papers 2009-17, Department of Economics, Louisiana State University.
    20. Gregor Gonza & Anže Burger, 2017. "Subjective Well-Being During the 2008 Economic Crisis: Identification of Mediating and Moderating Factors," Journal of Happiness Studies, Springer, vol. 18(6), pages 1763-1797, December.

    More about this item

    Keywords

    Unemployment; Hartz reforms; Happiness; SOEP;
    All these keywords.

    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
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:jhappi:v:22:y:2021:i:4:d:10.1007_s10902-020-00297-7. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.springer.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.