The Bitter Taste of Unemployment – Evidence from Plant Closures and Layoffs

Christopher Prömel and Max Steinhardt ()

No 68, Berlin School of Economics Discussion Papers from Berlin School of Economics

Abstract: This study examines the effects of unemployment on bitterness, which describes a feeling of not having achieved what one deserves compared to others. Pooled OLS and fixed effects estimates reveal a positive association between unemployment and bitterness. To identify the causal effect of unemployment on bitterness, we exploit variation from plant closures and layoffs in Germany, combining entropy balancing with difference-in-differences estimation. We find that unemployment leads to a substantial and significant increase in bitterness of nearly half a point on the 1-7 point Likert scale. We demonstrate the robustness of our findings and that both the experience of job loss and the state of being unemployed contribute separately to a significant increase in bitterness, with longer unemployment duration resulting in higher levels of bitterness. Lastly, we evaluate the persistence of our effects, finding significant long-term effects for those who remain unemployed for over one year.

Keywords: Bitterness; Attitudes; Unemployment; Job Loss (search for similar items in EconPapers)
JEL-codes: I31 J64 J65 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2025-07-23
New Economics Papers: this item is included in nep-eur and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:bdp:dpaper:0068

DOI: 10.48462/opus4-5893

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