1 Well-being Consequences of Unemployment Namkee Ahn (FEDEA) J. R. García (FEDEA) J. F. Jimeno (Banco de España)

2 “The great end of all human industry is the attainment of happiness. For this were arts invented, sciences cultivated, laws ordained, and societies modelled,... Even the lonely savage,..., forgets not, for a moment, this grand object of his being.” David Hume (1742, The Stoic)

3 Consequences of Unemployment  Income and consumption drop.  Psychological and emotional damage: Loss of identity, low self-esteem, stress, anxiety, depression.  Gain more time for non-market activity: leisure, training, physical exercise and home-making activity.  Impact on other family members.

4 Information on Individual Well-being in ECHP  Satisfaction with Work or Main Activity  Satisfaction with Financial Situation  Satisfaction with Housing Situation  Satisfaction with Leisure Time  Health Status

5 In this paper:  Well-being differences between the employed and the unemployed: Determinants.  Differences across country: Determinants.  Institutional factors: Unemployment protection, labor market functioning, expectation.

6 Table 1: Average Satisfaction Levels among the Employees and the Unemployed Data: Pooled Cross-section of ECHP ( ) Main activityFinanceLeisure time CountryEmp.Un.Diff.Emp.Un.Diff.Emp.Un.Diff.UR Total 4,382,631,763,812,421,393,864,36-0,499,26 Austria 4,933,001,934,292,701,594,474,96-0,494,06 Belgium 4,493,031,464,162,941,223,884,62-0,748,71 Denmark 4,934,100,834,543,501,044,315,00-0,685,54 Finland 4,543,031,514,032,641,404,124,95-0,8312,48 France 4,412,571,843,702,381,323,974,44-0,4710,84 Germany 4,372,112,263,862,211,653,894,59-0,708,30 Greece 3,992,091,903,342,091,263,394,34-0,9510,20 Ireland 4,572,711,863,842,001,844,224,26-0,048,69 Italy 4,031,922,113,451,881,573,554,13-0,58 11,05 Luxembourg 4,752,182,564,232,042,194,324,99-0,673,00 Netherlands 4,734,040,694,593,690,904,064,46-0,404,59 Portugal 4,001,852,143,111,961,153,573,90-0,335,76 Spain 4,232,381,853,442,081,353,404,11-0,7115,45 UK 4,332,511,823,771,961,803,804,33-0,53 8,60

7 Table 2: Changes in satisfaction by changes in employment status between any two consecutive years Main ActivityFinance EEEEEUEUUEUEUUUUEEEEEUEUUEUEUUUU Total -0,025-1,1501,4180,0470,019-0,6050,8560,024 Austria -0,015-1,3631,8110,0470,004-0,8741,0100,027 Belgium -0,025-0,9791,8200,1290,000-0,6790,8930,026 Denmark -0,050-0,3900,646-0,002-0,011-0,5550,6930,006 Finland -0,043-0,9521,5710,1390,052-0,5801,0170,071 France -0,035-1,1981,7850,1820,010-0,5030,8450,079 Germany -0,071-1,7461,638-0,308-0,060-0,7340,865-0,132 Greece 0,002-1,1191,155-0,0180,069-0,6190,7340,001 Ireland -0,023-1,2431,5760,1480,072-0,7281,1080,062 Italy -0,025-1,2091,3910,0250,012-0,7480,8960,046 Netherlands -0,019-0,6410,7390,0420,026-0,4920,6750,017 Portugal -0,003-1,4661,582-0,0120,017-0,6810,743-0,043 Spain -0,022-1,1951,550-0,0280,034-0,4720,912-0,016 UK -0,054-1,5981,1410,1030,031-0,8280,9910,082

8 Leisure timeNumber of Observations EEEEEUEUUEUEUUUUEEEEEUEUUEUEUUUU Total -0,0130,624-0,616-0,021208,4406,1816,92216,166 Austria -0,0190,810-0,6070,04711, Belgium -0,0040,710-0,724-0,05813, ,384 Denmark -0,0200,685-0,571-0,05413, Finland -0,0270,662-0,595-0,00311, France 0,0140,503-0,551-0,04428, ,154 Germany -0,0770,655-0,848-0,1147, Greece -0,0340,713-0,904-0,09712, ,164 Ireland 0,0010,209-0,3370,12210, Italy -0,0300,681-0,684-0,01127, ,881 Netherlands -0,0160,618-0,3350,01123, ,720 Portugal -0,0080,208-0,1870,00121, Spain 0,0170,819-0,766-0,03120,5881,3231,5102,595 UK -0,0370,344-0,6610,1305,

9 Table 3: Results from Fixed-Effect OLS Regressions Data: ECHP Main activityFinanceLeisure time Coeffi| t |Coeffi| t |Coeffi| t | Health (re: very bad) Very good 0,7937,080,5125,780,3917,20 Good 0,6531,180,4221,800,2611,57 Fair 0,5325,440,3015,930,146,45 Bad 0,2813,440,168,150,135,88 Social club 0,023,720,00-0,720,036,31 Contact with friends 0,023,800,024,660,0713,07 Contact with relatives 0,059,040,059,700,1018,38 Log Household income 0,1732,430,4591,140,000,28 Log Unemployment rate 0,011,74-0,25-32,68-0,05-5,64 Hausman Chi-sq. (fixed vs random effect) N444310

10 Table 3: Continued Main ActivityFinanceLeisure time Coeff.|t|Coeff.|t|Coeff.|t| Unemployed (re: employed) -1,68-28,22-0,80-14,520,7311,45 Unemployed * (re: Germany) Austria 0,354,530,111,54-0,09-1,03 Belgium 0,435,970,142,07-0,08-1,00 Denmark 1,0014,570,335,12-0,07-0,98 Finland 0,314,510,081,26-0,04-0,50 France 0,253,910,152,60-0,14-2,10 Greece 0,629,580,172,790,121,73 Ireland 0,395,29-0,01-0,09-0,46-5,77 Italy 0,447,020,060,97-0,12-1,79 Netherlands 1,2119,000,366,16-0,40-5,91 Portugal 0,263,940,182,96-0,45-6,37 Spain 0,436,870,162,80-0,01-0,16 UK 0,505,260,101,22-0,35-3,57

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