Elusive Effects of Unemployment on Happiness
Labour Institute for Economic Research
Aalto University School of Business
HECER Discussion Paper No. 47
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.
Number of Pages in PDF File: 16
Keywords: happiness, unhappiness, life satisfaction, unemployment
JEL Classification: C30, J28, J31working papers series
Date posted: April 20, 2005
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