Work and Unemploymentestimates now tells us what happens on average every time
the individual changes his or her labor- force status. We now
estimate that, compared with full- time employment, unem-
ployment in Britain reduces life- satisfaction by 0.3– 0.4 points
(see Tables 4.1 and 4.2). The German estimate is higher at 0.7,
while the Australian one is lower at around 0.2.
Adaptation and Scarring
If unemployment hurts, do you get used to it after a while
so that it becomes less painful? The answer is No. That is the
Table 4.2. How life- satisfaction (0– 10) is affected by labor force status—
compared with full- time workers (household panel data)Britain Germany Australia USAPooled cross- section
Unemployed −0.70 (.04) −0.99 (.03) −0.31 (.03) −0.45 (.02)
Part- time
workers
0.03 (.02) −0.03 (.02) 0.08 (.02) NASelf- employed 0.06 (.03) −0.08 (.03) 0.01 (.03) 0.08 (.01)
Out of labor
force
−0.29 (.02) −0.10 (.02) −0.04 (0.2) −0.23 (.01)Panel
Unemployed −0.46 (.04) −0.71 (.03) −0.18 (.02)
Part- time
workers
−0.01 (.02) −0.11 (.02) 0.01 (.01) NASelf- employed −0.04 (.03) −0.04 (.04) 0.03 (.02)
Out of labor
force
−0.14 (.03) −0.14 (.02) −0.04 (.02)