Unemployment continues to be one of the major challenges in industrialized societies. Aside from its economic and societal repercussions, questions concerning the subjective experience of unemployment have recently attracted increasing attention. Although existing studies have documented the detrimental effects of unemployment for cognitive (life satisfaction) and affective well-being, studies directly comparing these two dimensions of subjective well-being and their temporal dynamics in anticipation of and response to unemployment are absent from the literature. Using longitudinal data of the German Socio-Economic Panel (SOEP) and applying fixed effects regressions, we investigate changes in cognitive and affective well-being prior to and after job loss. Extending previous studies, we use discrete emotion measures instead of affect balance indicators to assess affective well-being. Our results support existing findings that unemployment leads to decreases in life satisfaction and that the unemployed do not adapt towards previous levels of life satisfaction. We also find that individuals more often experience sadness and anxiety, and less often happiness when transitioning into unemployment. Importantly, changes in affective well-being are less enduring compared to the changes in life satisfaction.
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Whereas Clark (2003) and Clark and Georgellis (2013) use the GHQ-12 measure, which mainly assesses the frequency of experiencing specific negative feelings, Krueger and Mueller (2011) investigate the impact of job loss on the frequency of positive (happy) and negative emotions (sad, stressed) separately.
It is worth mentioning, however, that this method has recently been introduced in the SOEP Innovation Sample, although the data are not yet available; for details, see http://www.europeansurveyresearch.org/conference/programme2015?sess=176#372.
As a robustness check, we also ran our analyses including household income as an explanatory variable. Although the unemployment coefficients became smaller, the overall results did not change substantially.
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von Scheve, C., Esche, F. & Schupp, J. The Emotional Timeline of Unemployment: Anticipation, Reaction, and Adaptation. J Happiness Stud 18, 1231–1254 (2017). https://doi.org/10.1007/s10902-016-9773-6
- Cognitive well-being
- Affective well-being
- Life satisfaction