Heterogeneity in the Relationship between Unemployment and Subjective Well-Being: A Quantile Approach

Martin Binder and Alex Coad ()

Economics Working Paper Archive from Levy Economics Institute

Abstract: Unemployment has been robustly shown to strongly decrease subjective well-being (or "happiness"). In the present paper, we use panel quantile regression techniques in order to analyze to what extent the negative impact of unemployment varies along the subjective well-being distribution. In our analysis of British Household Panel Survey data (1996-2008) we find that, over the quantiles of our subjective well-being variable, individuals with high well-being suffer less from becoming unemployed. A similar but stronger effect of unemployment is found for a broad mental well-being variable (GHQ-12). For happy and mentally stable individuals, it seems their higher well-being acts like a safety net when they become unemployed. We explore these findings by examining the heterogeneous unemployment effects over the quantiles of satisfaction with various life domains.

Keywords: Subjective Well-being; Unemployment; Quantile Analysis; Heterogeneity; British Household Panel Survey; Domain Satisfaction (search for similar items in EconPapers)
JEL-codes: I31 J01 J64 (search for similar items in EconPapers)
Date: 2014-06
New Economics Papers: this item is included in nep-dem, nep-eur, nep-hap and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Journal Article: Heterogeneity in the Relationship Between Unemployment and Subjective Wellbeing: A Quantile Approach (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:lev:wrkpap:wp_808

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