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New measures of the costs of unemployment: Evidence from the subjective well-being of 3.3 million Americans

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  • John F. Helliwell
  • Haifang Huang

Abstract

Using two large US surveys, we estimate the effects of unemployment on the subjective well-being of the unemployed and the rest of the population. For the unemployed, the non-pecuniary costs of unemployment are several times as large as those due to lower incomes, while the indirect effect at the population level is fifteen times as large. For those who are still employed, a one percentage point increase in local unemployment has an impact on well-being roughly equivalent to a four percent decline in household income. We also find evidence indicating that job security is an important channel for the indirect effects of unemployment.

Suggested Citation

  • John F. Helliwell & Haifang Huang, 2011. "New measures of the costs of unemployment: Evidence from the subjective well-being of 3.3 million Americans," NBER Working Papers 16829, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:16829
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    References listed on IDEAS

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    More about this item

    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
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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