Labor market policy and subjective well-being during the Great Recession

Robson Morgan and Kelsey O'Connor

No 372, GLO Discussion Paper Series from Global Labor Organization (GLO)

Abstract: Average subjective well-being decreased in Europe during the Great Recession, primarily among people with less than a college education and people younger than retirement age. However, some countries fared better than others depending on their labor market policies. More generous unemployment support, which provided income replacement or programs to assist unemployed workers find jobs, mitigated the negative effects for most of the population, although not youth. In contrast, stricter employment protection legislation exacerbated the negative effects. We present further evidence that suggests the exacerbating effects of employment protection legislation are due to greater rigidities in the labor market, which in turn affect perceived future job prospects. Our analysis is based on two-stage least squares regressions using individual subjective wellbeing data obtained from Eurobarometer surveys and variation in labor market policy across 23 European countries.

Keywords: life satisfaction; active labor market policy; unemployment support; employment protection legislation; Eurobarometer (search for similar items in EconPapers)
JEL-codes: H53 I31 I38 J28 J65 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-eur, nep-hap and nep-lab
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https://www.econstor.eu/bitstream/10419/200980/1/GLO-DP-0372.pdf (application/pdf)

Related works:
Journal Article: Labor Market Policy and Subjective Well-Being During the Great Recession (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:glodps:372

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