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Bowling Alone or Bowling at All?: The Effect of Unemployment on Social Participation

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  • Lars Kunze
  • Nicolai Suppa

Abstract

This article examines the impact of unemployment on social participation for Germany using the German Socio-Economic Panel. We find significant negative, robust and, for some activities, lasting effects of unemployment on social participation. Causality is established by focussing on plant closures as exogenous entries into unemployment. Social norms, labor market prospects and the perception of individual failure are shown to be relevant for explaining these findings. Furthermore, our results not only (i) provide novel insights into the determinants of the unemployed’s unhappiness but also (ii) highlight an hitherto unexplored channel through which unemployment influences economic outcomes, namely by altering the long-run level of social capital, and (iii) point to an alternative explanation of unemployment hysteresis based on access to information.

Suggested Citation

  • Lars Kunze & Nicolai Suppa, 2014. "Bowling Alone or Bowling at All?: The Effect of Unemployment on Social Participation," SOEPpapers on Multidisciplinary Panel Data Research 703, DIW Berlin, The German Socio-Economic Panel (SOEP).
  • Handle: RePEc:diw:diwsop:diw_sp703
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    References listed on IDEAS

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    1. Assar Lindbeck & Sten Nyberg & Jörgen W. Weibull, 1999. "Social Norms and Economic Incentives in the Welfare State," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 1-35.
    2. Yoav Benjamini & Abba M. Krieger & Daniel Yekutieli, 2006. "Adaptive linear step-up procedures that control the false discovery rate," Biometrika, Biometrika Trust, vol. 93(3), pages 491-507, September.
    3. Bauernschuster, Stefan & Falck, Oliver & Woessmann, Ludger, 2014. "Surfing alone? The internet and social capital: Evidence from an unforeseeable technological mistake," Journal of Public Economics, Elsevier, vol. 117(C), pages 73-89.
    4. Linda Babcock & William Congdon & Lawrence Katz & Sendhil Mullainathan, 2012. "Notes on behavioral economics and labor market policy," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-14, December.
    5. Flinn, Christopher J & Heckman, James J, 1983. "Are Unemployment and Out of the Labor Force Behaviorally Distinct Labor Force States?," Journal of Labor Economics, University of Chicago Press, vol. 1(1), pages 28-42, January.
    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. Browning, Martin & Heinesen, Eskil, 2012. "Effect of job loss due to plant closure on mortality and hospitalization," Journal of Health Economics, Elsevier, vol. 31(4), pages 599-616.
    8. Blanchflower, David G. & Oswald, Andrew J., 2004. "Well-being over time in Britain and the USA," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1359-1386, July.
    9. Marcel Fafchamps, 2006. "Development and social capital," Journal of Development Studies, Taylor & Francis Journals, vol. 42(7), pages 1180-1198.
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    Citations

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    Cited by:

    1. Nicolai Suppa, 2018. "Towards a multidimensional poverty index for Germany," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 45(4), pages 655-683, November.
    2. Hetschko, Clemens & Preuss, Malte, 2015. "Income in Jeopardy: How losing employment affects the willingness to take risks," Discussion Papers 2015/32, Free University Berlin, School of Business & Economics.
    3. repec:eee:labeco:v:53:y:2018:i:c:p:63-74 is not listed on IDEAS
    4. Adrian Chadi & Clemens Hetschko, 2017. "Income or Leisure? On the Hidden Benefits of (Un-)Employment," CESifo Working Paper Series 6567, CESifo Group Munich.
    5. Pohlan, Laura, 2018. "Unemployment and social exclusion," ZEW Discussion Papers 18-029, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    6. Adrian Chadi & Clemens Hetschko, 2015. "How Job Changes Affect People's Lives: Evidence from Subjective Well-Being Data," SOEPpapers on Multidisciplinary Panel Data Research 747, DIW Berlin, The German Socio-Economic Panel (SOEP).
    7. Lars Kunze & Nicolai Suppa, 2017. "The Effect of Unemployment on Social Participation of Spouses: Evidence from Plant Closures in Germany," SOEPpapers on Multidisciplinary Panel Data Research 898, DIW Berlin, The German Socio-Economic Panel (SOEP).
    8. Kunze, Lars & Suppa, Nicolai, 2016. "Unemployment as a social norm revisited: Novel evidence from German counties," Ruhr Economic Papers 611, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    9. Philipp Marek & Benjamin Damm & Tong-Yaa Su, 2015. "Beyond the Employment Agency: The Effect of Social Capital on the Duration of Unemployment," SOEPpapers on Multidisciplinary Panel Data Research 812, DIW Berlin, The German Socio-Economic Panel (SOEP).
    10. Emanuela Ghignoni, 2017. "Who do you know or what do you know? Informal recruitment channels, family background and university enrolments," Working Papers 179, University of Rome La Sapienza, Department of Public Economics.
    11. Pavlina R. Tcherneva, 2017. "Unemployment: The Silent Epidemic," Economics Working Paper Archive wp_895, Levy Economics Institute.

    More about this item

    Keywords

    Unemployment; social participation; plant closure; fixed effects; well-being;

    JEL classification:

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

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