Are there Regional Variations in the Psychological Cost of Unemployment in South Africa?

Are certain groups of unemployed individuals hurt less by unemployment than others? This paper is an attempt to test the hypothesis that non- pecuniary costs of unemployment may vary between societies with different unemployment rates. Using cross-sectional data from the SALDRU93 survey, we show that individuals’ reported well-being levels are inversely related to unemployment for South African adults as to be expected in richer countries. Reported well-being levels are shown to be associated negatively with regional unemployment rates for the employed. However, unemployment appears to hurt less for the individual if unemployment rates in the society are high.