| Unemployment has persistently been found to severely decrease the life satisfaction of individuals.
Even after income and other socioeconomic characteristics are controlled for, the
employment status remains an important determinant of happiness, pointing to non-pecuniary
functions of work. But what effect does labour market policy have? Can the psychosocial
functions of work be fulfilled by activation measures, offsetting the detrimental life satisfaction
effect of unemployment? Analyzing panel data, this paper shows that the biggest German
activation programme ‘One-Euro-Job’ is connected to a level of life satisfaction that is significantly
higher than the one of respective unemployed welfare benefit recipients. This effect
is especially strong if participants perceive the measure to match their personal skills and to
increase their future employment chances, but vanishes if participants perceive it as degrading.
In total, satisfaction scores of participants do not match the level of the regularly employed.
In contrast to these pronounced differences in cross-sectional analyses, longitudinal
models show similar effects but are less statistically robust, pointing to certain selection biases. |
Wulfgramm, Melike
2011
in: Socio-Economic Review, 9 (3): 477-501
|
