## Regional unemployment and norm-induced effects on life satisfaction

2014
Journal article
Published
##### Published in
Empirical Economics ; 46 (2014), 3. - pp. 1111-1141. - ISSN 0377-7332. - eISSN 1435-8921
##### Abstract
While rising unemployment generally reduces people’s happiness, researchers argue that there is a compensating social-norm effect for the unemployed individual, who might suffer less when it is more common to be unemployed. This empirical study rejects this thesis for German panel data, however, and finds that individual unemployment is even more hurtful when regional unemployment is higher. On the other hand, an extended model that separately considers individuals who feel stigmatised from living off public funds yields strong evidence that this group of people does in fact suffer less when the normative pressure to earn one’s own living is lower. A comprehensive discussion reconciles these findings with the existing research and concludes that to find evidence for the often described social-norm effect it is worthwhile to analyse disutility associated with benefit receipts.
330 Economics
##### Keywords
Social norms, Regional unemployment, Individual unemployment, Well-being, Social benefits, Labour market policies
##### Cite This
ISO 690CHADI, Adrian, 2014. Regional unemployment and norm-induced effects on life satisfaction. In: Empirical Economics. 46(3), pp. 1111-1141. ISSN 0377-7332. eISSN 1435-8921. Available under: doi: 10.1007/s00181-013-0712-7
BibTex
@article{Chadi2014-05Regio-43142,
year={2014},
doi={10.1007/s00181-013-0712-7},
title={Regional unemployment and norm-induced effects on life satisfaction},
number={3},
volume={46},
issn={0377-7332},
journal={Empirical Economics},
pages={1111--1141},
}

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<dcterms:abstract xml:lang="eng">While rising unemployment generally reduces people’s happiness, researchers argue that there is a compensating social-norm effect for the unemployed individual, who might suffer less when it is more common to be unemployed. This empirical study rejects this thesis for German panel data, however, and finds that individual unemployment is even more hurtful when regional unemployment is higher. On the other hand, an extended model that separately considers individuals who feel stigmatised from living off public funds yields strong evidence that this group of people does in fact suffer less when the normative pressure to earn one’s own living is lower. A comprehensive discussion reconciles these findings with the existing research and concludes that to find evidence for the often described social-norm effect it is worthwhile to analyse disutility associated with benefit receipts.</dcterms:abstract>
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