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Subjective Well-Being Approach to Valuing Unemployment: Direct and Indirect Cost

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  • Beja, Edsel Jr.

Abstract

The study presents a subjective well-being approach to estimating the direct and indirect cost of unemployment. Using a combined dataset from the World Values Survey and the World Development Indicators, the study finds that the indirect cost of unemployment is about twice the size of the direct cost of unemployment. The overall estimate for the cost of unemployment turns out to be 1.5 income quintiles change in income. The finding of the study not only confirms a high price to pay for not working out the unemployment problem but also highlights the importance of public policy that seeks to guarantee employment and provide social protection for the unemployed.

Suggested Citation

  • Beja, Edsel Jr., 2016. "Subjective Well-Being Approach to Valuing Unemployment: Direct and Indirect Cost," MPRA Paper 101080, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:101080
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    References listed on IDEAS

    as
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    6. Edsel Beja, 2015. "Direct and indirect impacts of parenthood on happiness," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 62(4), pages 307-318, December.
    7. Easterlin, Richard A., 1974. "Does Economic Growth Improve the Human Lot? Some Empirical Evidence," MPRA Paper 111773, University Library of Munich, Germany.
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    More about this item

    Keywords

    Subjective well-being; unemployment; valuation;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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