, Volume 3, Issue 2, pp 167-192

Social Security and Well-Being of the Unemployed in 42 Nations

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Abstract

It is generally believed that life is better in nations with a high level of social security. Yet earlier studies have found no difference in average health and happiness between nations that differ in state welfare effort. While these previous studies focused on general population averages, the subjects of this study are the unemployed. As the unemployed are likely to benefit most from a high level of social security, one would expect the unemployed to be happier in nations with a generous social security system than in nations where the government is less open handed.

Data for 1990 are available for 42 nations. Social security is indicated as the expenditures in percentage of GDP. Well-being is measured by self-reports of health, overall happiness, life satisfaction, and mood.

Again hardly any relation was found between well-being and social security expenditures: on three of the four well-being indicators the unemployed in welfare states reported about the same levels of well-being as the unemployed in non-welfare states. When the analysis is restricted to 23 first world nations, the outcome is about the same. Comparison over time reveals that in typical welfare states changes in social security expenditures are related to changes in well-being levels of the unemployed, but such a pattern is not so obvious in nations with less generous state welfare. It is concluded that in general the level of social security has hardly any beneficial (or detrimental) effect on the well-being of the unemployed. Possible explanations for this outcome are explored.