Why Does Unemployment Hurt the Employed?: Evidence from the Life Satisfaction Gap Between the Public and the Private Sector
High unemployment rates entail substantial costs to the working population in terms of reduced subjective well-being. This paper studies the importance of individual economic security, in particular job security, by exploiting sector-specific institutional differences in the exposure to economic shocks. Public servants have stricter dismissal protection and face a lower risk of their organization becoming bankrupt than private sector employees. The empirical results from individual panel data for Germany and repeated cross-sectional data for the United States and Europe show that private sector employees’ subjective well-being reacts indeed much more sensitive to fluctuations in unemployment rates than public sector employees’.
Year of publication: |
2010
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Authors: | Luechinger, Simon ; Meier, Stephan ; Stutzer, Alois |
Published in: |
Journal of Human Resources. - University of Wisconsin Press. - Vol. 45.2010, 4
|
Publisher: |
University of Wisconsin Press |
Saved in:
Online Resource
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