Why are the Unemployed so Unhappy?: Evidence from Panel Data
Posted: 8 Jul 1997
This paper tests for the importance of non-pecuniary costs of unemployment using a longitudinal dataset on life satisfaction of working-age men in Germany. We show that unemployment has a large detrimental effect on satisfaction after individual specific fixed effects are controlled for. The non-pecuniary effect is much larger than the effect that stems from the associated loss of income.
JEL Classification: J64, J69
Suggested Citation: Suggested Citation