Unemployment and Happiness Adaptation: The Role of the Living Standard

Abstract

This paper explains why people’s subjective well-being (SWB) fails to adapt to unemployment, even though people adapt to various life events. Although the unemployed downgrade their living standard when they enter into unemployment, their income is not sufficient to maintain their living. In the long run, the minimum required income for their living standard remain higher than their income. Thus, neither financial satisfaction (FS) nor life satisfaction (LS) adapts. The role of the living standard in various topics is discussed.

Keywords: unemployment; subjective well-being; adaptation; living standard; financial satisfaction

JEL Classification: I3; J6; D6