Elusive Effects of Unemployment on Happiness

HECER Discussion Paper No. 47

16 Pages Posted: 20 Apr 2005

See all articles by Petri Bockerman

Petri Bockerman

Labour Institute for Economic Research; University of Turku - Turku School of Economics

Pekka Ilmakunnas

Aalto University School of Business

Date Written: January 2005

Abstract

This paper explores the connection between unemployment and subjective well-being in Finland by using cross-sections for the years 1990, 1996 and 2000 from World Values Surveys. An unprecedented increase in the national unemployment rate (from 3 to 17 per cent) did not produce a drop in the mean level of subjective well-being. Experiencing unemployment personally reduces life satisfaction, but does not have a significant effect on happiness in ordered logit estimation. However, generalized ordered logit estimation reveals that being unemployed has a negative effect on happiness at lower happiness scores, but no significant effect at high happiness levels.

Keywords: happiness, unhappiness, life satisfaction, unemployment

JEL Classification: C30, J28, J31

Suggested Citation

Bockerman, Petri and Ilmakunnas, Pekka, Elusive Effects of Unemployment on Happiness (January 2005). HECER Discussion Paper No. 47, Available at SSRN: https://ssrn.com/abstract=702121 or http://dx.doi.org/10.2139/ssrn.702121

Petri Bockerman (Contact Author)

Labour Institute for Economic Research ( email )

FIN-00530 Helsinki
Finland
+358 9 2535 7332 (Phone)
+358 9 2535 7332 (Fax)

HOME PAGE: http://www.petribockerman.fi/

University of Turku - Turku School of Economics ( email )

Rehtorinpellonkatu 3
TURKU, FI-20500
Finland

Pekka Ilmakunnas

Aalto University School of Business ( email )

PO Box 21240
FI-00076 Aalto, Helsinki
Finland
+358 40 5815390 (Phone)

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