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Happiness and unemployment: a panel data analysis for Germany


Winkelmann, Liliana; Winkelmann, Rainer (1995). Happiness and unemployment: a panel data analysis for Germany. Applied Economics Quarterly, 41(4):293-307.

Abstract

We use data from the German Socio-Economic Panel to investigate how individual happiness is affected by unemployment. Unemployment has a large and negative effect even after controlling for individual specific fixed effects. Nonparticipation, in contrast, is much less harmful to happiness. Further, we decompose the total well-being costs of unemployment and find that well above three quarters are non-pecuniary, and below one quarter pecuniary. One implication is that income support programs for the unemployed do very little at mitigating the adverse effects of unemployment, and such transfers are unlikely to generate unemployment.

We use data from the German Socio-Economic Panel to investigate how individual happiness is affected by unemployment. Unemployment has a large and negative effect even after controlling for individual specific fixed effects. Nonparticipation, in contrast, is much less harmful to happiness. Further, we decompose the total well-being costs of unemployment and find that well above three quarters are non-pecuniary, and below one quarter pecuniary. One implication is that income support programs for the unemployed do very little at mitigating the adverse effects of unemployment, and such transfers are unlikely to generate unemployment.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Language:English
Date:1995
Deposited On:11 Feb 2008 12:21
Last Modified:05 Apr 2016 12:17
Publisher:Duncker & Humblot
ISSN:1611-6607
Related URLs:http://aeq.diw.de/aeq/index.jsp
Permanent URL: http://doi.org/10.5167/uzh-1189

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