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Regional unemployment and norm-induced effects on life satisfaction

Listed author(s):
  • Chadi, Adrian

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: https://www.econstor.eu/bitstream/10419/51378/1/672471299.pdf
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Paper provided by Center of Applied Economic Research Münster (CAWM), University of Münster in its series CAWM Discussion Papers with number 47.

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Date of creation: 2011
Handle: RePEc:zbw:cawmdp:47
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Web page: http://www.wiwi.uni-muenster.de/cawm/

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  1. Andrew Clark, 2001. "Unemployment As A Social Norm: Psychological Evidence from Panel Data," DELTA Working Papers 2001-17, DELTA (Ecole normale supérieure).
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  3. Assar Lindbeck & Sten Nyberg, 2001. "Raising Children to Work Hard: Altruism, Work Norms and Social Insurance," CESifo Working Paper Series 498, CESifo Group Munich.
  4. Ada Ferrer-i-Carbonell & Paul Frijters, 2002. "How important is Methodology for the Estimates of the Determinants of Happiness?," Tinbergen Institute Discussion Papers 02-024/3, Tinbergen Institute.
  5. Shields, Michael A. & Wheatley Price, Stephen, 2001. "Exploring the Economic and Social Determinants of Psychological and Psychosocial Health," IZA Discussion Papers 396, Institute for the Study of Labor (IZA).
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  8. Lindbeck, A., 1994. "Welfare State Disincentives with Endogenous Habits and Norms," Papers 589, Stockholm - International Economic Studies.
  9. 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.
  10. Alberto Alesina & Nicola Fuchs-Schundeln, 2005. "Good bye Lenin (or not?): The effect of Communism on people's preferences," Harvard Institute of Economic Research Working Papers 2076, Harvard - Institute of Economic Research.
  11. Alm, James & Torgler, Benno, 2006. "Culture differences and tax morale in the United States and in Europe," Journal of Economic Psychology, Elsevier, vol. 27(2), pages 224-246, April.
  12. Nattavudh Powdthavee, 2003. "Are there Regional Variations in the Psychological Cost of Unemployment in South Africa?," Labor and Demography 0310006, EconWPA, revised 28 Oct 2003.
  13. Stutzer, Alois & Lalive, Rafael, 2001. "The Role of Social Work Norms in Job Searching and Subjective Well-Being," IZA Discussion Papers 300, Institute for the Study of Labor (IZA).
  14. Michael A. Shields & Stephen Wheatley Price, 2005. "Exploring the economic and social determinants of psychological well-being and perceived social support in England," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 168(3), pages 513-537.
  15. Nick Carroll, 2005. "Unemployment and Psychological Well-Being," CEPR Discussion Papers 492, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  16. Paul Frijters & John P. Haisken-DeNew & Michael A. Shields, 2004. "Money Does Matter! Evidence from Increasing Real Income and Life Satisfaction in East Germany Following Reunification," American Economic Review, American Economic Association, vol. 94(3), pages 730-740, June.
  17. H. Peyton Young, 2007. "Social Norms," Economics Series Working Papers 307, University of Oxford, Department of Economics.
  18. Benno Torgler, 2005. "A Knight without a Sword?. The Effects of Audit Courts on Tax Morale," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 161(4), pages 735-735, December.
  19. Andreas Knabe & Steffen Rätzel, 2011. "Scarring or Scaring? The Psychological Impact of Past Unemployment and Future Unemployment Risk," Economica, London School of Economics and Political Science, vol. 78(310), pages 283-293, 04.
  20. Adrian Chadi, 2010. "How to Distinguish Voluntary from Involuntary Unemployment: On the Relationship between the Willingness to Work and Unemployment-Induced Unhappiness," Kyklos, Wiley Blackwell, vol. 63(3), pages 317-329, 08.
  21. Simon Luechinger & Stephan Meier & Alois Stutzer, 2010. "Why Does Unemployment Hurt the Employed?: Evidence from the Life Satisfaction Gap Between the Public and the Private Sector," Journal of Human Resources, University of Wisconsin Press, vol. 45(4), pages 998-1045.
  22. Heinemann, Friedrich, 2007. "Is the Welfare State Self-destructive? A Study of Government Benefit Morale," ZEW Discussion Papers 07-029, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  23. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
  24. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-659, May.
  25. DiTella, Rafael & MacCulloch, Robert & Oswald, Andrew J., 2001. "Preferences over inflation and unemployment: Evidence from surveys of happiness," ZEI Working Papers B 03-2001, University of Bonn, ZEI - Center for European Integration Studies.
  26. Nattavudh Powdthavee, 2007. "Are there Geographical Variations in the Psychological Cost of Unemployment in South Africa?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 80(3), pages 629-652, February.
  27. repec:hhs:iuiwop:557 is not listed on IDEAS
  28. Elster, Jon, 1989. "Social Norms and Economic Theory," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 99-117, Fall.
  29. Michael Shields & Stephen Wheatley Price & Mark Wooden, 2009. "Life satisfaction and the economic and social characteristics of neighbourhoods," Journal of Population Economics, Springer;European Society for Population Economics, vol. 22(2), pages 421-443, April.
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