New Measures of the Costs of Unemployment: Evidence from the Subjective Well-Being of 3.3 Million Americans

52 Pages Posted: 28 Feb 2011 Last revised: 27 Dec 2023

See all articles by John F. Helliwell

John F. Helliwell

University of British Columbia (UBC) - Department of Economics; National Bureau of Economic Research (NBER)

Haifang Huang

University of Alberta - Department of Economics

Date Written: February 2011

Abstract

Using two large US surveys, we estimate the effects of unemployment on the subjective well-being of the unemployed and the rest of the population. For the unemployed, the non-pecuniary costs of unemployment are several times as large as those due to lower incomes, while the indirect effect at the population level is fifteen times as large. For those who are still employed, a one percentage point increase in local unemployment has an impact on well-being roughly equivalent to a four percent decline in household income. We also find evidence indicating that job security is an important channel for the indirect effects of unemployment.

Suggested Citation

Helliwell, John F. and Huang, Haifang, New Measures of the Costs of Unemployment: Evidence from the Subjective Well-Being of 3.3 Million Americans (February 2011). NBER Working Paper No. w16829, Available at SSRN: https://ssrn.com/abstract=1770383

John F. Helliwell (Contact Author)

University of British Columbia (UBC) - Department of Economics ( email )

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Haifang Huang

University of Alberta - Department of Economics ( email )

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