Can Subjective Well-Being Predict Unemployment Length?

Mavridis, Dimitris

关键词: ACCOUNTING;    AGGREGATE UNEMPLOYMENT;    CREATIVE DESTRUCTION;    DEVELOPMENT ECONOMICS;    DIVORCE;   

DOI  :  10.1596/1813-9450-5293
RP-ID  :  WPS5293

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper uses 16 waves of panel datafrom the British Household Panel Survey to evaluate the roleof subjective well-being in determining labor markettransitions. It confirms a previous finding in theliterature: individuals report a fall in their happinesswhen they lose a job, but they report a smaller fall whenthey are surrounded by unemployed peers, an effect calledthe "social norm". The main results of interestare that job search effort and unemployment duration areaffected by the utility differential between having a joband being unemployed. Since this differential is alsoaffected by the social norm, it implies that whenunemployment increases, the unemployed are happier and theyreduce their search effort. These results indicate thatunemployment hysteresis has labor supply causes.