The Origins of Happiness

Work and Unemployment

Very similar estimates are found in the household panel

data. In Table 4.3 we add to each pooled cross- section

equation a variable representing the proportion of the last

five years for which the person was unemployed.^11 The es-

timated coefficients are all about 0.6, meaning again that

1.0

0.5

0.0

–0.5

–1.0

–1.5

–2.0

–2.5

–4 –2 0

Britain

24 +

Eec

t o

n life

-satisfa

ct

ion (

0–

10

)

Years before and after becoming unemployed

–4 –2 0

Germany

24 + –4 –2 0

Australia

24 +

Figure 4.1. Adaptation to unemployment. (household panel data) (men).
Note: The value of 0 corresponds to more than four years before becoming unemployed.

Table 4.3. How life- satisfaction (0– 10) is affected by current and previ-

ous unemployment (household panel data) (pooled cross- section)

Units Britain Germany Australia

Current

unemployment

1, 0 −0.74 (.07) −0.82 (.03) −0.37 (.04)

Previous

unemployment

0– 1 −0.44 (.13) −0.73 (.05) −0.53 (.10)