Looking Back in Anger? Retirement and Unemployment Scarring

25 Pages Posted: 3 Jun 2014

See all articles by Clemens Hetschko

Clemens Hetschko

Free University of Berlin (FUB)

Andreas Knabe

Otto-von-Guericke-Universit├Ąt 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)

Multiple version iconThere are 2 versions of this paper

Date Written: May 3, 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 Schob, Ronnie, Looking Back in Anger? Retirement and Unemployment Scarring (May 3, 2014). CESifo Working Paper Series No. 4784. Available at SSRN: https://ssrn.com/abstract=2445334

Clemens Hetschko (Contact Author)

Free University of Berlin (FUB) ( email )

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

Andreas Knabe

Otto-von-Guericke-Universit├Ąt 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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