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 Simon Luechinger A1 Stephan Meier A1 Alois Stutzer 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’.