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Subjective Well-Being Approach to Valuing Unemployment: Direct and Indirect Cost

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Abstract

The study presents a subjective well-being approach to estimating the direct and indirect cost of unemployment. Using a combined dataset from the World Values Survey and the World Development Indicators, the study finds that the indirect cost of unemployment is about twice the size of the direct cost of unemployment. The overall estimate for the cost of unemployment turns out to be 1.5 income quintiles change in income. The finding of the study not only confirms a high price to pay for not working out the unemployment problem but also highlights the importance of public policy that seeks to guarantee employment and provide social protection for the unemployed.

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Funding

This study was funded by a research grant from Ateneo de Manila University (research grant number: RCW-18-2016).

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  1. Department of Economics, Ateneo de Manila University, 1108, Quezon City, Philippines

    Edsel L. Beja Jr

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  1. Edsel L. Beja Jr
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Correspondence to Edsel L. Beja Jr.

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Beja, E.L. Subjective Well-Being Approach to Valuing Unemployment: Direct and Indirect Cost. Int. Journal of Com. WB 3, 277–287 (2020). https://doi.org/10.1007/s42413-019-00053-7

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  • DOI: https://doi.org/10.1007/s42413-019-00053-7

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