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Regional Unemployment and Norm-Induced Effects on Life Satisfaction

  • Adrian Chadi

While rising unemployment generally reduces people's happiness, researchers argue that there is a compensating social-norm effect for the unemployed individual, who might suffer less when it is more common to be unemployed. This empirical study, however, rejects this thesis for German panel data and finds individual unemployment to be even more hurtful when aggregate unemployment is higher. On the other hand, an extended model that separately considers individuals who feel stigmatised from living off public funds yields strong evidence that this group of people does in fact suffer less when the normative pressure to earn one's own living is lower.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.376039.de/diw_sp0387.pdf
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Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 387.

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Length: 24 p.
Date of creation: 2011
Date of revision:
Handle: RePEc:diw:diwsop:diw_sp387
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