Subjective well-being and the duration of aggregate unemployment in Europe
This study examines whether the distribution of aggregate unemployment by duration affects individual well-being. Two hypotheses are provided to explain how the shares of short-term (up to 3 months) and long-term (more than 1 year) unemployed people could affect the well-being of the employed and unemployed: The severity hypothesis and the flow hypothesis. Using data from almost 300,000 individuals from 11 EU countries, an ordered probit estimator is used to analyze the impact of the distribution of aggregate unemployment by duration on individual well-being. We find significant evidence in favor of both the severity and the flow hypotheses. Hence, the fear of losing (or not finding) a job is more detrimental when the prospect is to remain unemployed for a longer time. At some point, however, both the employed and unemployed adapt to unemployment at the macro level. Using an alternative specification that allows for a duration-specific risk of becoming/being unemployed, we arrive at similar conclusions. What seems to bother people is thus not just the risk of becoming/remaining unemployed, but more so the risk of being out of work for 4 to 12 months.
|Date of creation:||2008|
|Contact details of provider:|| Postal: Ulmenstr. 69, 18057 Rostock|
Web page: http://www.wiwi.uni-rostock.de/en/econ/department-of-economics/
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.:
- 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.
- Andrew Clark, 2001. "Unemployment As A Social Norm: Psychological Evidence from Panel Data," DELTA Working Papers 2001-17, DELTA (Ecole normale supérieure).
- Carol Graham & Stefano Pettinato, 2001. "Happiness, Markets, and Democracy: Latin America in Comparative Perspective," Journal of Happiness Studies, Springer, vol. 2(3), pages 237-268, September.
- Olivier Jean Blanchard & Peter Diamond, 1994. "Ranking, Unemployment Duration, and Wages," Review of Economic Studies, Oxford University Press, vol. 61(3), pages 417-434.
- Olivier Jean Blanchard & Peter Diamond, 1990. "Ranking, Unemployment Duration, and Wages," NBER Working Papers 3387, National Bureau of Economic Research, Inc.
- Blanchard, O.J. & Diamond, P., 1990. "Ranking, Unemployment Duration, And Wages," Working papers 546, Massachusetts Institute of Technology (MIT), Department of Economics.
- Carsten Ochsen & Heinz Welsch, 2011. "The social costs of unemployment: accounting for unemployment duration," Applied Economics, Taylor & Francis Journals, vol. 43(27), pages 3999-4005.
- Ochsen, Carsten & Welsch, Heinz, 2006. "The social costs of unemployment: Accounting for unemployment duration," Thuenen-Series of Applied Economic Theory 60, University of Rostock, Institute of Economics.
- Andrew E. Clark, 2006. "A Note on Unhappiness and Unemployment Duration," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 52(4), pages 291-308.
- Andrew E. Clark, 2006. "A note on unhappiness and unemployment duration," PSE Working Papers halshs-00590444, HAL.
- Clark, Andrew E., 2006. "A Note on Unhappiness and Unemployment Duration," IZA Discussion Papers 2406, Institute for the Study of Labor (IZA).
- Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
- Bruno S. Frey & Alois Stutzer, "undated". "What can Economists Learn from Happiness Research?," IEW - Working Papers 080, Institute for Empirical Research in Economics - University of Zurich.
- Bruno S. Frey & Alois Stutzer, 2001. "What Can Economists Learn from Happiness Research?," CESifo Working Paper Series 503, CESifo Group Munich.
- Cameron,A. Colin & Trivedi,Pravin K., 2005. "Microeconometrics," Cambridge Books, Cambridge University Press, number 9780521848053, October.
- Blanchflower, David G., 2001. "Unemployment, Well-Being, and Wage Curves in Eastern and Central Europe," Journal of the Japanese and International Economies, Elsevier, vol. 15(4), pages 364-402, December.
- Christopher A. Pissarides, 1992. "Loss of Skill During Unemployment and the Persistence of Employment Shocks," The Quarterly Journal of Economics, Oxford University Press, vol. 107(4), pages 1371-1391.
- Ochsen, Carsten & Welsch, Heinz, 2012. "Who benefits from labor market institutions? Evidence from surveys of life satisfaction," Journal of Economic Psychology, Elsevier, vol. 33(1), pages 112-124. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:zbw:roswps:97. 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: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.