Unemployment and life satisfaction: A cross-cultural comparison

Abstract

The paper addresses the issue of the nature and determinants of variations between countries in the severity of the implications of unemployment for psychological well-being. It focuses on ten countries in the European Union over the period 1983 to 1994. It establishes that there are consistent differences between countries over time. It then examines a number of potential explanations, in particular relating to the level of unemployment, the social composition of unemployment, the strength of the work ethic in the society and the characteristics of welfare institutions. It concludes that such differences cannot be accounted for in terms of the level of unemployment or its composition in terms of age and sex. They are also unrelated to measures of employment commitment. Rather the severity of the impact of unemployment has to be understood in terms of the interaction between the characteristics of the welfare regime and the composition of the unemployed with respect to household position.