Can Subjective Well-Being Predict Unemployment Length?

This paper uses 16 waves of panel data from the British Household Panel Survey to evaluate the role of subjective well-being in determining labor market transitions. It confirms a previous finding in the literature: individuals report a fall in their happiness when they lose a job, but they report a smaller fall when they are surrounded by unemployed peers, an effect called the "social norm". The main results of interest are that job search effort and unemployment duration are affected by the utility differential between having a job and being unemployed. Since this differential is also affected by the social norm, it implies that when unemployment increases, the unemployed are happier and they reduce their search effort. These results indicate that unemployment hysteresis has labor supply causes.

Bibliographic Details

Main Author:	Mavridis, Dimitris
Format:	Policy Research Working Paper biblioteca
Language:	English
Published:	2010-05-01
Subjects:	ACCOUNTING, AGGREGATE UNEMPLOYMENT, CREATIVE DESTRUCTION, DEVELOPMENT ECONOMICS, DIVORCE, ECONOMETRICS, ECONOMIC RESEARCH, EMPLOYMENT RATE, EMPLOYMENT STATUS, EXTERNALITIES, EXTERNALITY, FUTURE RESEARCH, HIGH UNEMPLOYMENT, HOUSEHOLD LEVEL, HOUSEHOLD SURVEY, HOUSEHOLD SURVEYS, ILL HEALTH, INCOME, JOB LOSS, JOB SEARCH, JOBLESS RATE, JOBS, LABOR DEMAND, LABOR ECONOMICS, LABOR FORCE, LABOR MARKET, LABOR MARKET POLICIES, LABOR RELATIONS, LABOR SUPPLY, LABOUR, LABOUR FORCE, MACROECONOMIC SHOCKS, MACROECONOMICS, MATERNITY LEAVE, MENTAL HEALTH, NUMBER OF HOUSEHOLDS, PHILLIPS CURVE, POLICY IMPLICATIONS, POLICY RESEARCH, POLICY RESEARCH WORKING PAPER, POLICY RESPONSE, PRESENT ANALYSIS, PRESENT VALUE, PREVIOUS SECTION, PROBIT REGRESSION, PROGRESS, PROPORTIONAL HAZARD MODEL, REGIONAL UNEMPLOYMENT, RESPECT, SAME SEX, SELF EMPLOYED, SELF-ESTEEM, SOCIAL NORMS, SOCIAL RESEARCH, SPOUSE, SPOUSES, SURVIVAL ANALYSIS, UNEMPLOYED, UNEMPLOYED INDIVIDUALS, UNEMPLOYED PERSONS, UNEMPLOYMENT, UNEMPLOYMENT BENEFITS, UNEMPLOYMENT DURATION, UNEMPLOYMENT INSURANCE, UNEMPLOYMENT RATE, UNEMPLOYMENT RATES, UNEMPLOYMENT SPELL, UNEMPLOYMENT SPELLS, UTILITY FUNCTION, WAGE DISTRIBUTION, WORKERS, YOUTH,
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100526161301 http://hdl.handle.net/10986/3807
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