Looking Back in Anger? Retirement and Unemployment Scarring

26 Pages Posted: 22 May 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 Schöb

affiliation not provided to SSRN

Multiple version iconThere are 2 versions of this paper

Date Written: May 2014

Abstract

Previous studies find that past unemployment reduces life satisfaction even after reemployment for non-monetary reasons (unemployment scarring). It is not clear, however, whether this scarring is only caused by employment-related factors, such as worsened working conditions, or increased future uncertainty as regards income and employment. Using German panel data, we identify non-employment-related scarring by examining the transition of unemployed people to retirement as a life event after which employment-related scarring does not matter anymore. We find evidence for non-employment-related non-monetary unemployment scarring for people who were unemployed for the first time in their life directly prior to retirement, but not for people with earlier unemployment experiences.

Keywords: unemployment scarring; life satisfaction; retirement

JEL Classification: I31; J26

Suggested Citation

Hetschko, Clemens and Knabe, Andreas and Schöb, Ronnie, Looking Back in Anger? Retirement and Unemployment Scarring (May 2014). SOEPpaper No. 652. Available at SSRN: https://ssrn.com/abstract=2439601 or http://dx.doi.org/10.2139/ssrn.2439601

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 Schöb

affiliation not provided to SSRN

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