New measures of the costs of unemployment: Evidence from the subjective well-being of 2.3 million Americans
By exploiting two very large samples of US subjective well-being data we are able to obtain comparable estimates of the monetary and other costs of unemployment on the unemployed themselves, while simultaneously estimating the effects of local employment on the subjective well-being of the rest of the population. For those who are unemployed, the subjective well-being consequences can be divided into income and non-income effects, with the latter being five times larger than the former. This is similar to what has been found in many countries, as is our finding that the non-income effects are lower for individuals living in areas of high unemployment. Most importantly, we are able to use the large sample size and variety of questions in the BRFSS and Gallup daily polls to reconcile, and extend to the United States, what had previously seemed to be contradictory results on the size and nature of the spillover effects of unemployment on subjective well-being. At the population level the spillover effects are twice as large as the direct effects, making the total well-being costs of unemployment fifteen times larger than those directly due to the lower incomes of the unemployed.
|Date of creation:||24 Feb 2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (780) 492-3406
Fax: (780) 492-3300
Web page: http://www.economics.ualberta.ca/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Wolfers, Justin, 2003.
"Is Business Cycle Volatility Costly? Evidence from Surveys of Subjective Well-Being,"
1751r, Stanford University, Graduate School of Business.
- Wolfers, Justin, 2003. "Is Business Cycle Volatility Costly? Evidence from Surveys of Subjective Well-Being," International Finance, Wiley Blackwell, vol. 6(1), pages 1-26, Spring.
- Justin Wolfers, 2003. "Is Business Cycle Volatility Costly? Evidence from Surveys of Subjective Wellbeing," NBER Working Papers 9619, National Bureau of Economic Research, Inc.
- Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008.
"Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles,"
Journal of Economic Literature,
American Economic Association, vol. 46(1), pages 95-144, March.
- Clark, Andrew E. & Frijters, Paul & Shields, Michael A., 2007. "Relative Income, Happiness and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," IZA Discussion Papers 2840, Institute for the Study of Labor (IZA).
- Andreas Knabe & Steffen Rätzel, 2007.
"Quantifying the psychological costs of unemployment: the role of permanent income,"
FEMM Working Papers
07012, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
- Andreas Knabe & Steffen Ratzel, 2011. "Quantifying the psychological costs of unemployment: the role of permanent income," Applied Economics, Taylor & Francis Journals, vol. 43(21), pages 2751-2763.
- Andreas Knabe & Steffen Rätzel, 2007. "Quantifying the Psychological Costs of Unemployment: The Role of Permanent Income," SOEPpapers on Multidisciplinary Panel Data Research 32, DIW Berlin, The German Socio-Economic Panel (SOEP).
- Robert J. MacCulloch & Rafael Di Tella & Andrew J. Oswald, 2001.
"Preferences over Inflation and Unemployment: Evidence from Surveys of Happiness,"
American Economic Review,
American Economic Association, vol. 91(1), pages 335-341, March.
- DiTella, Rafael & MacCulloch, Robert & Oswald, Andrew J., 2001. "Preferences over inflation and unemployment: Evidence from surveys of happiness," ZEI Working Papers B 03-2001, ZEI - Center for European Integration Studies, University of Bonn.
- Mavridis, Dimitris, 2010. "Can subjective well-being predict unemployment length ?," Policy Research Working Paper Series 5293, The World Bank.
- Winkelmann, Liliana & Winkelmann, Rainer, 1998. "Why Are the Unemployed So Unhappy? Evidence from Panel Data," Economica, London School of Economics and Political Science, vol. 65(257), pages 1-15, February.
When requesting a correction, please mention this item's handle: RePEc:ris:albaec:2011_003. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Brenda Carrier)
If references are entirely missing, you can add them using this form.