Unhappiness and Unemployment

Clark, Andrew E.; Oswald, Andrew J.

doi:10.2307/2234639

Cited by 2,001 publications

(1,473 citation statements)

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“…As a result, the loss of a job detrimentally affects well-being and may cause serious problems for mental health. Clark and Oswald (1994) and Winkelmann and Winkelmann (1998) document the close relationship between unemployment and unhappiness, and Stutzer and Lalive (2004) show that this effect depends on the social norm to live off one's own income. Theodossiou (1998) finds that the unemployed suffer more from anxiety, depression and loss of confidence compared to otherwise similar employed individuals.…”

Section: Related Literaturementioning

confidence: 97%

The public health costs of job loss

Kühn

Lalive

Zweimüller

2009

Journal of Health Economics

176

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We study the short-run effect of involuntary job loss on comprehensive measures of public health costs. We focus on job loss induced by plant closure, thereby addressing the reverse causality problem as job displacements due to plant closure are unlikely caused by workers' health status, but potentially have important effects on individual workers' health and associated public health costs. Our empirical analysis is based on a rich data set from Austria providing comprehensive information on various types of health care costs and day-by-day work history at the individual level. Our central findings are: (i) overall expenditures on medical treatments are not strongly affected by job displacement; (ii) job loss significantly increases expenditures for antidepressants and related drugs, as well as for hospitalizations due to mental health problems for men (but not for women) although the effects are economically rather small; and (iii) sickness benefits strongly increase due to job loss. The Public Health Costs of Job LossAndreas Kuhn, University of Zurich and IZA * Rafael Lalive, University of Lausanne, CEPR, CESifo, and IZA Josef Zweimüller, University of Zurich, CEPR, CESifo, and IZA September 2009Abstract We study the short-run effect of involuntary job loss on comprehensive measures of public health costs. We focus on job loss induced by plant closure, thereby addressing the reverse causality problem as job displacements due to plant closure are unlikely caused by workers' health status, but potentially have important effects on individual workers' health and associated public health costs. Our empirical analysis is based on a rich data set from Austria providing comprehensive information on various types of health care costs and day-by-day work history at the individual level. Our central findings are: (i) overall expenditures on medical treatments are not strongly affected by job displacement; (ii) job loss significantly increases expenditures for antidepressants and related drugs, as well as for hospitalizations due to mental health problems for men (but not for women) although the effects are economically rather small; and (iii) sickness benefits strongly increase due to job loss. JEL classification: I12, I19, J28, J65 Keywords: Social cost of unemployment, health, job loss, plant closure * We thank the editor, Andrew Street, and two anonymous referees for helpful comments and suggestions. We also thank

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Section: Related Literaturementioning

confidence: 97%

The public health costs of job loss

Kühn

Lalive

Zweimüller

2009

Journal of Health Economics

176

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“…Subjective questions on self-reported well-being have been used in economics to understand and explore a large range of interesting topics, such as unemployment, health, job situation, and income (Blanchflower and Oswald, 2004;Clark and Oswald, 1994;DiTella et al, 2001;Easterlin, 2001;Ferreri-Carbonell, 2005;Ferrer-i-Carbonell and Frijters, 2004;Ferrer-i-Carbonell and Van Praag, 2002;Frey and Stutzer, 2002;Frijters et al, 2004;Oswald, 1997;Van Praag and Ferrer-i-Carbonell, 2004). In doing so, economists take individuals answer to well-being questions as a proxy to measure utility (see, e.g.…”

Section: The Well-being Modelmentioning

confidence: 99%

Monetary valuation of informal care: the well‐being valuation method

2007

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SUMMARYThis paper estimates the monetary value of providing informal care by means of a well-being valuation method. This is done by assessing the compensating variation necessary to maintain the same level of well-being after an informal caregiver provides an extra hour of informal care. The informal caregiver's well-being is proxied by the answer to two subjective well-being questions that were posed in a questionnaire answered by 865 Dutch informal caregivers between the end of 2001 and the beginning of 2002. In the econometric analysis, a distinction is made between the care recipients who are and the ones who are not a family member of the informal caregiver. The results indicate that an extra hour of informal care is worth about 9 or 10 Euros. This equals 8 or 9 Euros if the care recipient is a family member and about 7 or 9 Euros if not. When applying the contingent valuation method to the same sample, the value obtained was 10.52 Euros per hour. This paper concludes that the well-being valuation method is a useful complement to the more traditional valuation methods in the health economics literature in general and more particularly for the economic valuation of informal care: it includes all costs and effects associated with providing care from the perspective of the informal caregiver, it is relatively cheap to implement, and it offers an additional possibility to determine the convergent validity of the different monetary valuation methods.

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“…More interestingly, empirical work in labor economics literature has established that unemployment is strongly negatively correlated with individual well-being, even after controlling for income and other individual characteristics. In other words, the unemployed are generally worse off than the employed, and by more than their lower income would predict (see, for example, Clark and Oswald (1994), Korpi (1997), Winkelmann and Winkelmann (1998), Oswald (2001)(2003), and Clark (2003) and references cited therein). For example, Winkelmann and Winkelmann (1998) used panel data on life satisfaction from German-Socio-Economic Panel for [1984][1985][1986][1987][1988][1989], where the individual's subjective well-being was measured on an ordinal scale from 0 to 10.…”

Section: Non-pecuniary Value Of Employmentmentioning

confidence: 99%

Non-Pecuniary Value of Employment and Natural Resource Extinction

Farzin

Akao

2006

SSRN Journal

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We assume that people value employment not only to earn income to satisfy their consumption needs but also as a means of community/social involvement that provides socio-psychological (non-pecuniary) benefits. We show that the latter incentive can encourage full employment harvesting resources and explain why poor resource-based communities may exhaust a natural resource in a finite time even if there is a sustainable path of resource consumption available. We show that communities could sustain their natural resources by using outside-the-community employment and economic diversification, but, to be effective, such policies must ensure that the outside wage rate and the initial capital stock are above certain minimum levels, which will be higher the longer these policies are delayed.

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Unhappiness and Unemployment

Cited by 2,001 publications

References 15 publications

The public health costs of job loss

The public health costs of job loss

Monetary valuation of informal care: the well‐being valuation method

Non-Pecuniary Value of Employment and Natural Resource Extinction

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