Changing Identity: Retiring from Unemployment

18 Pages Posted: 18 Mar 2014

See all articles by Clemens Hetschko

Clemens Hetschko

Free University of Berlin (FUB)

Andreas Knabe

Otto-von-Guericke-Universität Magdeburg - Institute of Economics and Business Administration; CESifo (Center for Economic Studies and Ifo Institute)

Ronnie Schob

Free University of Berlin (FUB); CESifo (Center for Economic Studies and Ifo Institute)

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Date Written: March 2014

Abstract

Using German panel data, we show that unemployed people are, on average, less satisfied with their life than employed people, but they report a substantial increase in their life satisfaction upon retirement. We interpret this finding using identity theory. Retirement raises the identity utility of the unemployed because it changes the social norms they are supposed to adhere to. The social norm for people of working age prescribes that able‐bodied people should be employed, whereas the social norm for the retired does not contain such expectations. Findings for various subgroups are consistent with that interpretation.

Suggested Citation

Hetschko, Clemens and Knabe, Andreas and Schob, Ronnie, Changing Identity: Retiring from Unemployment (March 2014). The Economic Journal, Vol. 124, Issue 575, pp. 149-166, 2014. Available at SSRN: https://ssrn.com/abstract=2410601 or http://dx.doi.org/10.1111/ecoj.12046

Clemens Hetschko (Contact Author)

Free University of Berlin (FUB) ( email )

Van't-Hoff-Str. 8
Berlin, Berlin 14195
Germany

Andreas Knabe

Otto-von-Guericke-Universität Magdeburg - Institute of Economics and Business Administration ( email )

Universitaetsplatz 2
Magdeburg, 39016
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Ronnie Schob

Free University of Berlin (FUB)

Van't-Hoff-Str. 8
Berlin, Berlin 14195
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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