Unemployment Research Paper

Unemployment Research Paper-10
The literature suggests that the extent of the negative effect of own unemployment may be complicated or moderated by contextual influences at the local or regional level.Clark (2003), for instance, argued that the impact of own unemployment on well-being is reduced in high unemployment regions.

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In particular, these perceptions explain why unemployed Germans had significantly lower predicted life satisfaction scores than their otherwise-equal peers in the three other countries.

Moreover, the unique Canadian results on moderating factors may be driven by seasonal employment features, as well as by strong rural-to-urban migration in Canada’s high unemployment regions.

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?

Text begins This paper investigates the effect of unemployment on life satisfaction from a comparative perspective.

It also tests whether the link between unemployment and life satisfaction is moderated or reinforced by contextual unemployment across regions within a country—either through a negative spillover or a positive social-norm effect, or both.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.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.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.The results suggest that noticeable non-pecuniary costs are associated with unemployment in the four countries studied.Cross-national differences also emerged in the impact of the moderating factors.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.

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