The effect of unemployment on noncognitive skills

Kristin Kleinjans

Applied Economics Letters, 2020, vol. 27, issue 17, 1387-1390

Abstract: Unemployment results in lower levels of cognitive skills and has long-term effects on health and economic well-being. In this paper, I show that unemployment also has negative effects on noncognitive skills, at least in the short term. Using a sample of Germans born between 1945 and 1995, I account for potential endogeneity by using state-level unemployment rates as instruments and controlling for past levels of noncognitive skills. The effects of not working are strong, reducing conscientiousness by 0.15 of a standard deviation for women and by 0.25 for men.

Date: 2020
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DOI: 10.1080/13504851.2019.1683140

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