Income in jeopardy: How losing employment affects the willingness to take risks

Hetschko, Clemens; Preuß, Malte

doi:10.1016/j.joep.2019.05.005

Cited by 52 publications

(16 citation statements)

References 89 publications

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“…5 We, therefore, expect working time to be particularly high after a job change, and we start our empirical analysis by shedding light on this issue. An empirical question is as to whether this need of signalling productivity applies rather to high‐skilled workers who could suffer severe income losses in absolute terms (Hetschko and Preuss forthcoming) or to low‐skilled workers who may be trapped in a low‐pay‐no‐pay cycle when being out of work for a long time (Fok et al . 2015).…”

Section: Theoretical Considerationsmentioning

confidence: 99%

“…Clark and Oswald 1994;Clark 2003;Clark et al 2008;Green 2011;Green and Heywood 2011;Helliwell and Huang 2014;Luechinger et al 2010;Stutzer and Lalive 2004). Moreover, life satisfaction strongly depends on the circumstances of a job, such as part-time versus fulltime employment (Berger 2013;Booth and van Ours 2008, 2009 or self-employment (Binder and Coad 2013;Hetschko 2016). While researchers are increasingly using satisfaction data to inspect the potential trade-offs between family and work life (e.g.…”

Section: Introductionmentioning

confidence: 99%

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How Job Changes Affect People's Lives — Evidence from Subjective Well‐Being Data

Chadi

Hetschko

2020

Brit J Industrial Rel

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Starting a new job is able to boost people's careers, but might come at the expense of other areas of life. To investigate individual implications of job mobility, we analyse the effects of job changes on time-use and indicators of subjective wellbeing using rich data from a representative German panel survey. We find that job switchers report relatively high levels of life satisfaction, at least for the first time after the job change. There is no such 'honeymoon' period for job changes triggered by plant closures. Instead, we find evidence for a harmful impact of involuntary mobility on family life.

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Section: Theoretical Considerationsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

How Job Changes Affect People's Lives — Evidence from Subjective Well‐Being Data

Chadi

Hetschko

2020

Brit J Industrial Rel

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“…In particular, the perception of labor-market risk (both job security for the employed and job prospects for those unemployed) has been shown to be an important determinant of emotional well-being (Knabe and Rätzel, 2011) and may mediate the latter's relationship with regional unemployment (Clark et al, 2010). Recently, Hetschko and Preuss (2019) find evidence suggesting that anticipating job loss makes individuals more risk averse via lower future income expectations and more uncertainty about the future. 18…”

Section: Testing For a Potential Mechanism: Emotional Well-beingmentioning

confidence: 99%

Becoming sensitive: Males’ risk and time preferences after the 2008 financial crisis

Jetter

Magnusson

Roth

2020

European Economic Review

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This paper presents evidence suggesting men's (but not women's) risk and time preferences have systematically become sensitive to local economic conditions since the 2008 financial crisis. Studying longitudinal, nationally representative data for 22,579 Australian-based respondents in up to 11 surveys from 2002-2015, men respond with increased risk aversion and impatience to a rise in their region's unemployment rate-but only since 2008. We find no such relationship for women or before the crisis. This conclusion persists when accounting for individual-level fixed effects, demographics, national economic conditions, the individual's employment situation, income, wealth, as well as region-and time-specific unobservables. Exploring a potential mechanism, higher regional unemployment rates are also linked to men (but not women) being more unhappy since 2008. This 'happiness channel' only partially explains the link between the local unemployment rate and risk preferences.

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“…Unexpected but severe events typically influence an individual's willingness to take risks. Unexpected unemployment has been shown to be an important driver of risk aversion (Hetschko & Preuss, 2019). The resulting poverty may lead to shortsighted and risk averse behavior (e.g., Haushofer & Fehr, 2014).…”

Section: Individual Traits and Situational Characteristicsmentioning

confidence: 99%

“…Whereas fear increases risk aversion (and leads to more tax compliance), anger typically leads to more risk seeking behavior (and less tax compliance) (e.g., Hetschko & Preuss, 2019;Lerner & Keltner, 2000Lerner, Li, Valdesolo, & Kassam, 2015).…”

Section: Individual Traits and Situational Characteristicsmentioning

confidence: 99%

Tax Policy Measures to Combat the SARS-CoV-2 Pandemic and Considerations to Improve Tax Compliance: A Behavioral Perspective

Alm

Blaufus

Fochmann

et al. 2020

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Governments have taken remarkable measures during the SARS-CoV-2 pandemic in their efforts to safeguard citizens' health and the economy. As a consequence, public debts have reached unprecedented levels, which will require at some point higher taxes. Ensuring that citizens pay these taxes requires consideration of the many factors that will likely affect their tax compliance decisions. In this paper, we reflect from a behavioral economic perspective the impact of tax policy measures on the perception, evaluation, and behavior of citizens and derive considerations to devise appropriate tax policies to ensure compliance in the future. We start with speculations about citizens' views of governmental restrictions and economic stimulus measures in response to the crisis, we apply these speculations to the acceptance and perceived effectiveness of policy measures on citizens' tax compliance behaviors, and we finish with their likely impact on determinants of tax compliance. Building on the derived insights, we deduce a set of considerations to improve tax complianceand to generate the necessary tax revenues to deal with the after-effects of SARS-CoV-2 when the pandemic is under control: communication, transparency and justification of measures, access to support, service provision, audits and penalties in case of free-riding, targeted audits, building social norms of cooperation, consideration of framing effects, development of plans and strategies for the future, and anticipation of hindsight biases.

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Income in jeopardy: How losing employment affects the willingness to take risks

Cited by 52 publications

References 89 publications

How Job Changes Affect People's Lives — Evidence from Subjective Well‐Being Data

How Job Changes Affect People's Lives — Evidence from Subjective Well‐Being Data

Becoming sensitive: Males’ risk and time preferences after the 2008 financial crisis

Tax Policy Measures to Combat the SARS-CoV-2 Pandemic and Considerations to Improve Tax Compliance: A Behavioral Perspective

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