At the beginning of the 2000s, Switzerland went through two global recessions: the Dot-com crisis and the Great Recession. Even though Switzerland experienced milder effects compared to its European neighbours, the Swiss unemployment rate increased considerably compared to its status quo. This paper explores the resilience of vulnerable groups to these economic downturns using both objective (income poverty and material deprivation) and subjective (wellbeing and satisfaction with the financial situation) indicators of quality of life. To analyse how quality of life evolved since the early 2000s, we use a longitudinal database: the Swiss Household Panel. Studying both objective and subjective indicators, results suggest that the dot-com crisis had a stronger negative effect than the Great Recession on vulnerable groups. This was particularly true for single parents and large families. Disadvantaged groups during the first crisis reacted in different ways during the second crisis. Some groups (the unemployed, the low-educated and the solo self-employed) experienced some scarring effects sometimes only according to objective indicators; others were resilient and continued with their normal trends (migrants and the young), whereas the most strongly affected groups during the first crisis (single parents and large families) registered an improvement in their conditions in the second crisis. These results point to a combination of subjective and objective indicators to evaluate the effects of recurrent crises on vulnerable groups.
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Financial difficulty was measured by asking the question: “How easy or difficult is for you to make ends meet?”.
Economic stress was measured with the level of difficulty in making ends meet.
Households are observed on average for 6.35 years, individuals for 5.57 years.
The statistical office has also highlighted that an important consequence of the last crisis was also short-term work. The number of people under this type of contracts rose from 40,000 to 72,500 from 2008 to 2009 and then declined steadily to reach before-crisis level in 2012. Conversely, there was no effect on average hours worked per worker (SFOS 2015).
In Switzerland, unemployment insurance is withheld from every salary and therefore, individuals can receive between 70 and 80% of their salary when they become unemployed. This benefit is usually provided for a period ranging from 6 months to 2 years (depending of the number of contributing years).
In Switzerland, the solo self-employed do not receive unemployment benefits. Therefore, they have no income security in case of a job loss.
By subjective wellbeing we mean satisfaction with life in general. This concept is expressed on a scale from 1 to 10 and corresponds to the answer to the question: “In general, how satisfied are you with your life if 0 means “not at all satisfied” and 10 means “completely satisfied”?”. Numerous works explained that questioning individuals about global evaluation of their lives provides a reliable measure of subjective wellbeing (Sandvik et al. 1993; Blanchower and Oswald 2004).
This threshold is calculated with all unavoidable expenses including rents, but not health insurance premiums, which are already deducted in our disposable income. In 2009, this threshold included 960 CHF for basic needs (food, clothing, transportation, leisure, etc.), 1183 CHF for housing costs and 100 CHF for other unexpected expenditures.
A third pillar corresponds to a private pension savings plan.
We estimate the models with the Stata commands “xtlogit” for poverty and material deprivation and “xtmixed” for subjective wellbeing and the satisfaction with the financial situation.
The threshold for satisfied is set at the mean of the distribution. A score equal to or higher than the mean qualifies people as satisfied.
Since 2009, benefits for families have slightly increased (SFOS 2017).
According to the OECD Family Database, childcare fees are 67.3% of the average wage. This is the highest proportion among the 35 OECD countries. For middle-class two-income families, this corresponds to 23.6% of net household income. Switzerland can be ranked together with other liberal countries with a proportional fee for childcare 2.4 times higher than in Germany or France and almost 9 times higher than in Austria.
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The authors declare that they have no conflict of interest.
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Simona-Moussa, J., Ravazzini, L. From One Recession to Another: Longitudinal Impacts on the Quality of Life of Vulnerable Groups. Soc Indic Res 142, 1129–1152 (2019). https://doi.org/10.1007/s11205-018-1957-5
- Economic crises
- Subjective wellbeing