Unemployment only temporarily lowers happiness in an eastern society

Hung‐Lin Tao

Review of Development Economics, 2022, vol. 26, issue 3, 1713-1732

Abstract: Using longitudinal data from the Taiwan Panel Study of Family Dynamics between 2007 and 2020, this study investigates how subjective well‐being (SWB) changes before, during, and after unemployment. Consistent with extant findings from Western populations, unemployment significantly lowered SWB. Moreover, the anticipation effect was observed—that is, SWB began to decline years before unemployment. The change pattern in SWB before unemployment in Taiwan is similar to that in Western countries. In addition, men's SWB is more responsive to unemployment than women's. However, SWB declined due to unemployment to a smaller degree in Taiwan than in Western populations. More importantly, in contrast to the findings from Western countries, Taiwanese people's SWB quickly recovered to the baseline after reemployment. Thus, unemployment does not permanently harm Taiwanese people's SWB. Similarly, the self‐esteem of unemployed Taiwanese also quickly recovered after reemployment. This study, therefore, argues that the impact of unemployment on SWB is culturally dependent.

Date: 2022
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