Unemployment and Social Exclusion

57 Pages Posted: 5 Jun 2018

See all articles by Laura Pohlan

Laura Pohlan

ZEW – Leibniz Centre for European Economic Research; Institute for Employment Research (IAB)

Date Written: 2018

Abstract

This paper analyzes the economic and social consequences of job loss which contribute to exclusion from society based on German linked survey and administrative data. To study the causal relationship between unemployment and multiple dimensions of social marginalization, I combine inverse propensity score weighting with a difference-in-differences approach. The results suggest that job loss has particularly detrimental effects on the subjective perception of social integration, life satisfaction, the access to economic resources and mental health. Moreover, this paper shows that becoming unemployed hinders the fulfillment of psychosocial needs that are typically associated with working, such as social status and higher self-efficacy. The effects of job loss are long-lasting, growing more profound the longer the duration of unemployment and persisting following reemployment. Looking at effect heterogeneity, I find that having a partner and being highly educated reduces the negative effects of job loss.

Keywords: job loss, unemployment, social exclusion, inverse probability weighting

JEL Classification: I31, J64

Suggested Citation

Pohlan, Laura and Pohlan, Laura, Unemployment and Social Exclusion (2018). ZEW - Centre for European Economic Research Discussion Paper No. 18-029, Available at SSRN: https://ssrn.com/abstract=3190989 or http://dx.doi.org/10.2139/ssrn.3190989

Laura Pohlan (Contact Author)

Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany

ZEW – Leibniz Centre for European Economic Research ( email )

L 7,1
Mannheim, 68161
Germany

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