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Income, Unemployment, Higher Education and Wellbeing in Times of Economic Crisis: Evidence from Granada (Spain)


The 2008 financial crisis hit the world’s economies in different ways. In Spain, the economic crisis has had an acute effect on unemployment and access to education, aggravated by the austerity plans of the Spanish government. In order to cope with the crisis, the government′s efforts have aimed to control public deficit and stabilize financial markets, rather than to directly support citizens’ wellbeing. This paper studies the relationship between unemployment, education, income and subjective wellbeing (SWB) in the city of Granada, one of the most negatively affected by the crisis, using representative household data for 2012. We approach SWB from three different but interrelated angles through answers to questions on life satisfaction, financial satisfaction and material needs satisfaction. Results reveal that in this context of crisis and high levels of unemployment, higher education and employment status are still strong determinants of SWB but that income has a weak and non-robust relationship with SWB, except in the case of satisfying material needs. In addition, the unemployment levels of the same age-group are also negatively linked with people’s SWB, contrary to what we would expect from previous literature predicting a positive impact of having others around experiencing the same precarious situation. Thus, our results suggest that in Spain, policies to address the effects of the crisis should strengthen their focus on providing employment opportunities and keeping people in education rather than cutting public spending to meet the needs of the financial markets.

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  1. The original questions and answers in Spanish are as follows: ¿Está usted satisfecha/o con su vida en general? (1) Muy satisfecha/o, (2) Satisfecha/o, (3) Normal, (4) Insatisfecha/o, (5) Muy insatisfecha/o, (6) NS/NC; ¿Está usted satisfecha/o con la renta que gana/n? (1) Muy satisfecha/o, (2) Satisfecha/o, (3) Normal, (4) Insatisfecha/o, (5) Muy insatisfecha/o, (6) NS/NC; En su opinión, con la renta de la que dispone/n en su hogar… (1) Se satisfacen holgadamente las necesidades, (2) Llega justo pero se satisfacen las necesidades, (3) Falta un poco para satisfacer las necesidades, (4) Falta mucho para satisfacer las necesidades, (5) NS/NC.

  2. The different options were self-employed, employee, unemployed, retired, student, homemaker and others.

  3. Even though VIF indicates that there is no problem of multicollinearity, we estimate different models introducing the variables sequentially. We are especially concerned by the possible influences between income, education and unemployment. However, the results are robust to adding or deleting variables in all models considering each dependent variable.

  4. The Consejo General del Poder Judicial is an autonomous and constitutional institution whose main duty is to guarantee the independence of judges in their functions.


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The authors would like to thank Francisco González Gómez, Miguel A. García Rubio, José María Tortosa, Mariano Rojas, Luis Ayala as well as two anonymous referees for their useful comments. Financial support from the Spanish Ministry of Economics and Competitiveness (Project ECO2009-08824/ECON and Project ECO2012-32189), the Government of Andalucía (Project P11-SEJ-7039) and Instituto de Estudios Fiscales (Project C-3929-00) is acknowledged.

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Correspondence to Jorge Guardiola.

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Guardiola, J., Guillen-Royo, M. Income, Unemployment, Higher Education and Wellbeing in Times of Economic Crisis: Evidence from Granada (Spain). Soc Indic Res 120, 395–409 (2015).

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  • Economic crisis
  • Subjective wellbeing
  • Unemployment
  • Material needs
  • Spain