Becoming (Un)Employed and Life Satisfaction: Asymmetric Effects and Potential Omitted Variable Bias in Empirical Happiness Studies
Posted: 29 Sep 2011 Last revised: 20 May 2017
Date Written: September 1, 2011
Becoming unemployed has negative effects on life satisfaction; a transition from unemployment to employment, however, has only small positive effects. This asymmetry indicates a potential 'omitted variable bias' in previous empirical happiness studies, with the consequence of underestimated effects of unemployment on life satisfaction. There are also gender-specific effects of asymmetry.
Keywords: happiness, life satisfaction, asymmetric effect, labour status, employment, unemployment
JEL Classification: I31, J01, Z13
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