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Boon or bane? Others' unemployment, well-being and job insecurity
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Boon or bane? Others' unemployment, well-being and job insecurity

Author

Listed:
  • Andrew E. Clark

    (PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, IZA - Institute for the Study of Labor - IZA)

  • Andreas Knabe

    (Freie Universität Berlin, CESifo - CESifo)

  • Steffen Rätzel

    (OVGU - Otto-von-Guericke-Universität Magdeburg = Otto-von-Guericke University [Magdeburg])

Abstract

The social norm of unemployment suggests that aggregate unemployment reduces the well-being of the employed, but has a far smaller effect on the unemployed. We use German panel data to reproduce this standard result, but then suggest that the appropriate distinction may not be between employment and unemployment, but rather between higher and lower levels of labour-market security, at least for men. Men with good job prospects, both employed and unemployed, are strongly negatively affected by regional unemployment. However, insecure employed men and poor-prospect unemployed men are less negatively, or even positively, affected. There is however no clear relationship for women. We analyse labour-market inequality and unemployment hysteresis in the light of our results.

Suggested Citation

  • Andrew E. Clark & Andreas Knabe & Steffen Rätzel, 2010. "Boon or bane? Others' unemployment, well-being and job insecurity," PSE-Ecole d'économie de Paris (Postprint) halshs-00754489, HAL.
    • Handle: RePEc:hal:pseptp:halshs-00754489
    DOI: 10.1016/j.labeco.2009.05.007
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    References listed on IDEAS

    as
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    2. Andrew E. Clark, 2003. "Unemployment as a Social Norm: Psychological Evidence from Panel Data," Journal of Labor Economics, University of Chicago Press, vol. 21(2), pages 289-322, April.
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    More about this item

    Keywords

    Unemployment; Externalities; Job insecurity; Well-being;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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