Unemployment, retrospective error, and life satisfaction

Hendrik Jürges ()
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Hendrik Jürges: Munich Center for the Economics of Aging (MEA), Postal: Amalienstr. 33, D-80799 Munich
Authors registered in the RePEc Author Service: Hendrik Juerges

No 5089, MEA discussion paper series from Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy

Abstract: I compare current and one-year retrospective data on unemployment in the German SOEP. 13 percent of all unemployment spells are not reported one year later, and another 7 percent are misreported. The ratio of retrospective to current unemployment (as a measure of unemployment salience) has increased in recent years and it is related to the loss in life satisfaction associated with unemployment. Individuals with weak labor force attachment, e.g. women with children or individuals close to retirement, have the largest propensity to underreport unemployment retrospectively. The data are consistent with evidence on retrospective bias found by cognitive psychologists and survey methodologists.

Date: 2005-06-30
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