Income or leisure? On the hidden benefits of (un-)employment

Arbeitspapier

We study the usually assumed trade-off between income and leisure in labor supply decisions using comprehensive German panel data. We compare non-employed individuals after plant closures with employed people regarding both income and time use as well as their subjective perceptions of these two factors. We find that the gain of non-working time translates into higher satisfaction with free time, while time spent on hobbies increases to a lesser extent than home production. Additionally, satisfaction with family life increases, which may be a hidden benefit of being unemployed. In contrast, satisfaction with income strongly declines when becoming jobless. Identity utility from earning a living may play the role of a hidden benefit of employment. Finally, we examine subjective assessments of income and leisure as potential predictors for job take-up. Non-employed people are particularly likely to take up a job soon when they are dissatisfied with their income.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IAAEU Discussion Paper Series in Economics ; No. 06/2017

Classification and Topics

• Classification: Wirtschaft ; Microeconomic Behavior: Underlying Principles ; Household Production and Intrahousehold Allocation ; General Welfare; Well-Being ; Time Allocation and Labor Supply ; Unemployment: Models, Duration, Incidence, and Job Search ; Unemployment Insurance; Severance Pay; Plant Closings
• Subject: labor supply ; plant closure ; leisure ; work-family conflict ; life satisfaction ; income satisfaction ; free time satisfaction ; family satisfaction

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Chadi, Adrian ; Hetschko, Clemens
• Event: Veröffentlichung
• (who): University of Trier, Institute for Labour Law and Industrial Relations in the European Union (IAAEU)
• (where): Trier
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/162801
• Last update: 10.03.2025, 11:41 AM CET