An Empirical Study on Transition and Unemployment

Abstract

The aim of this study is to investigate the negative correlation between unemployment and life satisfaction in the 27 post-socialist countries. First, we measured the well-being cost of life satisfaction brought from pecuniary and non-pecuniary sources. In line with the previous literature, the non-pecuniary mental cost was as big as 2.7 times of the pecuniary cost to the unemployed person. However, at the societal level, the ration between between pecuniary and non-pecuniary costs reversed. By demographic group, the detrimental impact of unemployment was bigger for mid-age group, and equal to males and females. Second, we measure the social pressure to the unemployed at the time of economic recession in 2008, and we found the pressure has been decreased due to pervasive unemployment rate. Third, on the top of the previously suggested policies to enhance the unemployed, we found that the quality of public service in everyday life can be helpful to mitigate the distrimental impact of unemployment, especially for the low-and middle-income groups.

Keywords: transition, unemployment, life satisfaction, public service