Conference Management, Happiness and Relational Goods

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The Impact of Past Unemployment on Current Life Satisfaction

Nicolai Suppa

Last modified: 2009-05-15

Abstract


The present paper provides empirical evidence for answering the question whether past experience of unemployment affects the current life satisfaction, using the German Socio-Economic Panel (SOEP). Estimations are carried out in two different approaches. The first aims at identifying the impact of past unemployment experiences on current life satisfaction, allowing the impact to differ over the current employment status of an individual. The second framework specifically addresses the question whether individuals can adapt to lasting unemployment by controlling the duration of current unemployment and distinguishing the pre-unemployment employment status. The estimations are carried out separately for men and women using an OLS fixed effects approach. For the first specification robustness checks are carried out in a conditional Logit framework that can control for fixed effects. In both specifications I find evidence against the notion of adaptation to unemployment for men as well as for women, suggesting unemployment to start bad and to stay bad for both, while existing evidence suggested that only men do not adapt to unemployment. Moreover I find prima facie evidence for a positive effect of longer past unemployment experiences on life satisfaction when being reemployed.


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