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How to Distinguish Voluntary from Involuntary Unemployment: On the Relationship between the Willingness to Work and Unemployment‐Induced Unhappiness

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  • Adrian Chadi

Abstract

Studies investigating the determinants of happiness show that unemployment causes high distress for most affected persons. Researchers conclude that the amount of this disutility demonstrates the involuntariness of unemployment. This paper applies the happiness research approach to German panel data in order to revive the underlying economic question of whether unemployment is voluntary or involuntary. Accordingly, the decline in life satisfaction associated with unemployment is related to the willingness to work. The results of the econometric investigation indicate a very strong connection between unemployment‐induced disutility and willingness to work, so that it is possible to divide unemployed individuals into certain categories, according to the potential voluntariness of unemployment. While there is a minority which can truly be regarded as voluntarily unemployed, most unemployed people actively search for work and suffer far more from unemployment than indicated by previous happiness research studies. A subsequent discussion includes a critical juxtaposition of the findings with policies such as the recent German labour market reforms.

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  • Adrian Chadi, 2010. "How to Distinguish Voluntary from Involuntary Unemployment: On the Relationship between the Willingness to Work and Unemployment‐Induced Unhappiness," Kyklos, Wiley Blackwell, vol. 63(3), pages 317-329, August.
    • Handle: RePEc:bla:kyklos:v:63:y:2010:i:3:p:317-329
    DOI: 10.1111/j.1467-6435.2010.00476.x
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    References listed on IDEAS

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    Cited by:

    1. Max Deter, 2021. "Hartz and Minds: Happiness Effects of Reforming an Employment Agency," Journal of Happiness Studies, Springer, vol. 22(4), pages 1819-1838, April.
    2. Suppa, Nicolai, 2021. "Unemployment and subjective well-being," GLO Discussion Paper Series 760, Global Labor Organization (GLO).
    3. Bruce T. Elmslie & Edinaldo Tebaldi, 2014. "The determinants of marital happiness," Applied Economics, Taylor & Francis Journals, vol. 46(28), pages 3452-3462, October.
    4. Adrian Chadi, 2019. "Dissatisfied with life or with being interviewed? Happiness and the motivation to participate in a survey," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 53(3), pages 519-553, October.
    5. Clemens Hetschko, 2016. "On the misery of losing self-employment," Small Business Economics, Springer, vol. 47(2), pages 461-478, August.
    6. Chadi, Adrian & Hoffmann, Manuel, 2021. "Television, Health, and Happiness: A Natural Experiment in West Germany," IZA Discussion Papers 14721, Institute of Labor Economics (IZA).
    7. Adrian Chadi, 2012. "Employed But Still Unhappy? On the Relevance of the Social Work Norm," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 132(1), pages 1-26.
    8. Z. Bilgen Susanlı, 2018. "Life satisfaction and unemployment in Turkey: evidence from Life Satisfaction Surveys 2004–2013," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(1), pages 479-499, January.
    9. Adrian Chadi, 2014. "Regional unemployment and norm-induced effects on life satisfaction," Empirical Economics, Springer, vol. 46(3), pages 1111-1141, May.
    10. Oskar Jost, 2022. "See you soon: fixed-term contracts, unemployment and recalls in Germany—a linked employer–employee analysis," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 49(3), pages 601-626, August.
    11. Ngai, Steven Sek-yum & Cheung, Chau-kiu & Yuan, Rui & Lin, Shen, 2016. "Work motivation of unemployed youths: Moderating effects of financial dependence on parents," Children and Youth Services Review, Elsevier, vol. 71(C), pages 157-165.
    12. Nikolova, Milena & Nikolaev, Boris N., 2021. "Family matters: The effects of parental unemployment in early childhood and adolescence on subjective well-being later in life," Journal of Economic Behavior & Organization, Elsevier, vol. 181(C), pages 312-331.
    13. Evan Hurwitz & George Cevora, 2021. "Forecasting performance of workforce reskilling programmes," Papers 2107.10001, arXiv.org.
    14. Peter Meer, 2014. "Gender, Unemployment and Subjective Well-Being: Why Being Unemployed Is Worse for Men than for Women," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 115(1), pages 23-44, January.
    15. Thomas Wai-Kee Yuen & Winnie Wan-Ling Chu, 2015. "Happiness in ASEAN member states," International Journal of Happiness and Development, Inderscience Enterprises Ltd, vol. 2(1), pages 69-83.

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