Why Does Unemployment Hurt the Employed?: Evidence from the Life Satisfaction Gap Between the Public and the Private Sector

• Autores: Simon. Luechinger, Stephan Meier, Alois Stutzer
• Localización: Journal of human resources, ISSN 0022-166X, Vol. 45, Nº 4, 2010, págs. 998-1045
• Idioma: inglés
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• Dialnet Métricas: 1 Cita
• Resumen

  • Abstract: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'.