Heterogeneity in the Relationship between Unemployment and Subjective Wellbeing: A Quantile Approach

27 Pages Posted: 15 Oct 2015

See all articles by Martin Binder

Martin Binder

University of the German Federal Armed Forces - Universität der Bundeswehr München; Bard College - The Levy Economics Institute

Alex Coad

European Union - IPTS

Date Written: October 2015

Abstract

Unemployment has been robustly shown to strongly decrease subjective wellbeing. Using panel quantile regression techniques, we analyse to what extent the negative impact of unemployment varies along the (conditional) subjective wellbeing distribution. In our analysis of British Household Panel Survey data (1996–2008), we find that individuals with high life satisfaction suffer less from becoming unemployed. A similar but stronger effect is found for a broad mental wellbeing variable (GHQ‐12). Higher wellbeing seems to act like a safety net when becoming unemployed. We explore these findings by examining the heterogeneous unemployment effects over the conditional quantiles of various life domain satisfactions.

Suggested Citation

Binder, Martin and Coad, Alex, Heterogeneity in the Relationship between Unemployment and Subjective Wellbeing: A Quantile Approach (October 2015). Economica, Vol. 82, Issue 328, pp. 865-891, 2015, Available at SSRN: https://ssrn.com/abstract=2674326 or http://dx.doi.org/10.1111/ecca.12150

Martin Binder (Contact Author)

University of the German Federal Armed Forces - Universität der Bundeswehr München ( email )

Werner-Heisenberg-Weg 39
Neubiberg
Munich, 85579
Germany

Bard College - The Levy Economics Institute ( email )

Blithewood
Annandale-on-Hudson, NY 12504-5000
United States

Alex Coad

European Union - IPTS

calle inca garcilaso, 3
Seville, 41092
Spain

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