Unemployment, Social Capital, and Subjective Well-Being
University of Zurich - Statistics and Empirical Economic Research; IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)
IZA Discussion Paper No. 2346
It has been shown in past research that unemployment has a large negative impact on subjective well-being of individuals. In this paper, I explore whether and to what extent people with more social capital are sheltered from the harmful effects of unemployment. Using data from the German Socio-Economic Panel 1984-2004, I find that social capital is an important predictor of well-being levels, but there is no evidence that it moderates the effect of unemployment on well-being. The well-being loss, in turn, is shown to predict job search and re-employment. Possible reasons for these findings are discussed, and suggestions for future research are given.
Number of Pages in PDF File: 27
Keywords: happiness, German Socio-Economic Panel, search, regression
JEL Classification: I31, J64, Z13
Date posted: October 17, 2006