RT Journal Article
SR Electronic
T1 Why Does Unemployment Hurt the Employed?
JF Journal of Human Resources
JO J Hum Resour
FD University of Wisconsin Press
SP 998
OP 1045
DO 10.3368/jhr.45.4.998
VO 45
IS 4
A1 Luechinger, Simon
A1 Meier, Stephan
A1 Stutzer, Alois
YR 2010
UL http://jhr.uwpress.org/content/45/4/998.abstract
AB 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’.