Public policy shapes the lives of individuals, and even more so if they depend on state support. In the case of unemployment, the financial situation is largely determined by cash transfers and daily routines depend on the involvement in active labour market policy measures. To what extent, however, can subjective well-being differences of European unemployed be traced back to the national design and generosity of labour market policy? This article applies multilevel and panel estimation techniques to identify the moderating effect of unemployment benefit generosity and active labour market policy on life satisfaction of the unemployed. While unemployment has strong negative life satisfaction effects in all 21 European countries under study, the generosity of passive labour market policy moderates this effect to a surprisingly large extent: the adverse effect of unemployment is almost doubled if unemployment benefits are meagre. This moderating effect can be explained both by a resource as well as a non-pecuniary mechanism. The positive moderating effect of active labour market policy is less robust across model specifications.

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. This paper analyses the effect of unemployment insurance generosity and active labour market policy on reemployment stability in Europe. Using EU-SILC and OECD data, we conduct discrete time survival analyses with shared frailty specification to identify policy effects at the micro and macro level. Empirical evidence suggests that unemployment benefit receipt is associated with longer reemployment duration at the individual level. Furthermore, countries with more generous unemployment insurance and higher ALMP spending show a more sustainable reintegration record of previously unemployed workers. These results point to a policy trade-off between the well-confirmed disincentive and locking-in effect of unemployment benefits and ALMP programmes on the one hand, and their positive effect on reemployment stability on the other hand.JEL Classification: J64, J65, J68

Neben den objektiv messbaren Folgen für die finanzielle Situation der Betroffenen geht Arbeitslosigkeit mit gravierenden psychosozialen Auswirkungen einher. So sinken die Lebenszufriedenheit sowie der soziale Status, und gesellschaftliche Ausgrenzungsprozesse finden statt. Diese Studie geht der Frage nach, inwiefern arbeitsmarktpolitische Aktivierungsprogramme diesen Prozessen entgegenwirken und sozialintegrative und psychosoziale Funktionen von Arbeit e füllen können. Während die untersuchten Ein-Euro-Jobs das gesellschaftliche Teilhabegefühl der Teilnehmer erhöhen, ändern sie nichts an der niedrigen sozialen Stellung der befragten Hartz-IV-Empfänger. Der Lebenszufriedenheitseffekt der Maßnahmeteilnahme ist zwar positiv, bleibt aber deutlich hinter dem Effekt regulärer Beschäftigung zurück.