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Highlights We analyse changes of life satisfaction accompanying transitions between unemployment, a regular job and employment subsidised by an in-work benefit programme. Subsidised employment improves life satisfaction compared to unemployment. Regular jobs increase life satisfaction compared to subsidised jobs, even if income and job characteristics are the same. Our results imply that a non-dependency norm affects the life satisfaction of workers.

This paper examines the experienced well-being of employed and unemployed workers. We use the survey-adapted Day Reconstruction Method of the Innovation Sample of the German Socio-Economic Panel Study to analyze the role of the employment status for well-being, incorporating time use. We use the novel P-index to summarize the average share of pleasurable minutes on a day and show that in contrast to evaluative life satisfaction the unemployed experiences more pleasurable minutes due to the absence of working episodes. Hence, we examine working episodes in depth. While working is among the activities with the highest propensities for an unpleasant experience, it is also among the most meaningful activities. We show that meaning is a central non-monetary determinant for pleasure at work and find that pleasure during work and job satisfaction have a comparable association with meaning.