Unemployment Research Paper

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Existing studies, in particular, have paid attention to the well-being gap between the employed and the unemployed (e.g., Winkelmann and Winkelmann 1998; Frey and Stutzer 2002).

The main argument is that employment provides many non-material benefits—such as social relationships or identity in society—and unemployment involves the loss of these benefits and thus can lead to poorer subjective well-being.

Using data from Canada, the United States, the United Kingdom and Germany, this study adds to the literature by examining the relationship between unemployment and life satisfaction from a comparative perspective.

Three questions are addressed: (1) Does unemployment have a significant negative effect on well-being, and how does the effect differ across countries?

The main argument is that employment provides many non-material benefits—such as social relationships and identity in society—and unemployment involves the loss of these benefits and thus can lead to poorer subjective well-being.

The extent of the negative effect of own unemployment may be further complicated or moderated by contextual unemployment—either through a negative spillover or a positive social-norm effect, or both—across regions within the country.

This paper also explores possible reasons behind the cross-national differences in both the observed employment–unemployment well-being gap and the moderating factors.

Individuals’ perceptions of job security and prospects play a crucial role.

Cross-national differences emerged in the impact of moderating factors.

Others’ unemployment (measured by the regional unemployment rate) is a strong moderating factor of own unemployment in Canada and to a lesser extent in the United States.

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