Report

Why Does Unemployment Hurt the Employed? Evidence from the Life Satisfaction Gap between the Public and the Private Sector

Author(s) / Creator(s)

Luechinger, Simon
Meier, Stephan
Stutzer, Alois

Abstract / Description

High rates of unemployment entail substantial costs to the working population in terms of reduced subjective well-being. This paper studies the importance of individual economic security, in particular job security, in workers' well-being by exploiting sector-specific institutional differences in the exposure to economic shocks. Public servants have stricter dismissal protection and face a lower risk of their organization's bankruptcy than private sector employees. The empirical results for individual panel data for Germany and repeated cross-sectional data for the United States and the European Union show that the sensitivity of subjective well-being to fluctuations in unemployment rates is much lower in the public sector than in the private. This suggests that increased economic insecurity constitutes an important welfare loss associated with high general unemployment.

Keyword(s)

Arbeitslosigkeit Zufriedenheit Arbeitsplatzsicherung Arbeitslosigkeit Zufriedenheit Arbeitsplatzsicherung unemployment life satisfaction job security public sector

Persistent Identifier

Date of first publication

2008

Is part of series

Forschungsinstitut zur Zukunft der Arbeit/ Institute for the Study of Labor: IZA Discussion Paper Series;3385

Citation

  • Author(s) / Creator(s)
    Luechinger, Simon
  • Author(s) / Creator(s)
    Meier, Stephan
  • Author(s) / Creator(s)
    Stutzer, Alois
  • PsychArchives acquisition timestamp
    2022-11-17T11:04:36Z
  • Made available on
    2008-06-02
  • Made available on
    2015-12-01T10:32:07Z
  • Made available on
    2022-11-17T11:04:36Z
  • Date of first publication
    2008
  • Abstract / Description
    High rates of unemployment entail substantial costs to the working population in terms of reduced subjective well-being. This paper studies the importance of individual economic security, in particular job security, in workers' well-being by exploiting sector-specific institutional differences in the exposure to economic shocks. Public servants have stricter dismissal protection and face a lower risk of their organization's bankruptcy than private sector employees. The empirical results for individual panel data for Germany and repeated cross-sectional data for the United States and the European Union show that the sensitivity of subjective well-being to fluctuations in unemployment rates is much lower in the public sector than in the private. This suggests that increased economic insecurity constitutes an important welfare loss associated with high general unemployment.
    en
  • Persistent Identifier
    https://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:bsz:291-psydok-16068
  • Persistent Identifier
    https://hdl.handle.net/20.500.11780/1069
  • Persistent Identifier
    https://doi.org/10.23668/psycharchives.9042
  • Language of content
    eng
  • Is part of
    IZA Discussion Paper Series No. 3385
  • Is part of series
    Forschungsinstitut zur Zukunft der Arbeit/ Institute for the Study of Labor: IZA Discussion Paper Series;3385
  • Keyword(s)
    Arbeitslosigkeit
    de
  • Keyword(s)
    Zufriedenheit
    de
  • Keyword(s)
    Arbeitsplatzsicherung
    de
  • Keyword(s)
    Arbeitslosigkeit
    de
  • Keyword(s)
    Zufriedenheit
    de
  • Keyword(s)
    Arbeitsplatzsicherung
    de
  • Keyword(s)
    unemployment
    en
  • Keyword(s)
    life satisfaction
    en
  • Keyword(s)
    job security
    en
  • Keyword(s)
    public sector
    en
  • Dewey Decimal Classification number(s)
    150
  • Title
    Why Does Unemployment Hurt the Employed? Evidence from the Life Satisfaction Gap between the Public and the Private Sector
    en
  • DRO type
    report
  • Visible tag(s)
    PsyDok