Scarring: The Psychological Impact of Past Unemployment

Arbeitspapier

This paper provides some of the first empirical evidence on the psychological impact of past unemployment. Using eleven waves of the German socio-economic panel (GSOEP) data set, we show, as is now standard, that those currently unemployed have far lower life satisfaction scores than do the currently employed. We also show that, over the whole sample, well-being is lower the greater has been the past experience of unemployment. In this sense, unemployment scars. However, an interaction term between current and past unemployment attracts a positive coefficient. This suggests a habituation effect whereby the negative well-being effect of unemployment is much lower for those who have been unemployed more often in the past. We also use the panel aspect of our data to present some evidence that those who suffer greater falls in well-being on entering unemployment are less likely to remain unemployed one year later. Together these findings offer a psychological explanation of persistent unemployment.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Department of Economics Discussion Paper ; No. 9903

Classification and Topics

• Classification: Wirtschaft ; Household Behavior: General ; Safety; Job Satisfaction; Related Public Policy ; Labor Turnover; Vacancies; Layoffs
• Subject: Unemployment ; Life Satisfaction ; Habituation ; Hysteresis ; Arbeitslosigkeit ; Lebensqualität ; Sozialpsychologie ; Hysteresis ; Theorie ; Deutschland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Clark, Andrew ; Georgellis, Yannis ; Sanfey, Peter
• Event: Veröffentlichung
• (who): University of Kent, Department of Economics
• (where): Canterbury
• (when): 1999

Further information

• Handle: http://hdl.handle.net/10419/105529
• Last update: 10.03.2025, 11:42 AM CET