Unemployment Research Paper

Unemployment Research Paper-41
The literature suggests that the extent of the negative effect of own unemployment may be complicated or moderated by contextual influences at the local or regional level.

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This is consistent with the social-norm hypothesis.

However, others’ unemployment has an ambiguous effect in the United Kingdom and an exacerbating effect in Germany.

The main argument is that employment provides many non-material benefits—such as social relationships and identity in society—and unemployment involves the loss of these benefits and thus can lead to poorer subjective well-being.

The extent of the negative effect of own unemployment may be further complicated or moderated by contextual unemployment—either through a negative spillover or a positive social-norm effect, or both—across regions within the country.

The results suggest that noticeable non-pecuniary costs are associated with unemployment in all four countries.

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, the unemployed tend to have lower life satisfaction than the employed by about 0.3 standard deviations in Canada, the United States and the United Kingdom, and by a larger margin of 0.47 standard deviations in Germany.

In particular, these perceptions explain why unemployed Germans had significantly lower predicted life satisfaction scores than their otherwise-equal peers in the three other countries.

Moreover, the unique Canadian results on moderating factors may be driven by seasonal employment features, as well as by strong rural-to-urban migration in Canada’s high unemployment regions.

Sensitivity testing further revealed that this Canadian anomaly was a phenomenon mainly in Atlantic Canada, not across the whole country.

Keywords: unemployment, subjective well-being, employment insecurity Canadians are generally happier than people in the rest of the world, according to various surveys and polls.


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