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The (Non-) Effect of Unemployment Benefits: Variations in the Effect of Unemployment on Life-Satisfaction Between EU Countries

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  • Jan Eichhorn

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Abstract

A negative effect of unemployment on subjective well-being has been demonstrated in many studies casting substantial doubt about assumptions of decisions of individuals to choose unemployment voluntarily as the utility-maximising option. These studies have been extended to take into account national-level context factors which have been shown to moderate the relationship between unemployment and life-satisfaction. So far most studies focussed mainly on economic indicators, although demographic and cultural differences between countries also affect how unemployment is perceived. An important variable that is not included in the majority of proper multilevel studies is the extent of unemployment benefits. Traditional micro-economic approaches argue that more extensive provisions should reduce the cost of unemployment and therefore reduce the motivation to regain employment—reflected in a reduction of the negative impact of unemployment. This study investigates this claim by using European Values Study data from all European Union countries and Norway as well as harmonised macroeconomic statistics from Eurostat. It finds that the effect of unemployment on life-satisfaction is indeed moderated by economic and demographic national-level factors, but not by unemployment benefits. To what extent unemployment reduces life-satisfaction varies greatly between countries, but appears to not be influenced by the extent of state unemployment provisions. Copyright Springer Science+Business Media Dordrecht 2014

Suggested Citation

  • Jan Eichhorn, 2014. "The (Non-) Effect of Unemployment Benefits: Variations in the Effect of Unemployment on Life-Satisfaction Between EU Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 119(1), pages 389-404, October.
  • Handle: RePEc:spr:soinre:v:119:y:2014:i:1:p:389-404
    DOI: 10.1007/s11205-013-0474-9
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    References listed on IDEAS

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    Cited by:

    1. Alyona A. Khaptsova & Shalom H. Schwartz, 2014. "How Robust Is The Association Of Life Satisfaction With Value Congruence? A Study Of Constructed Socio-Demographic Groups In A Russian National Sample," HSE Working papers WP BRP 26PSY2014, National Research University Higher School of Economics.

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