Unemployment Influences Satisfaction and Well-Being

As unemployment rises alongside economic instability, so does interest in the psychological downturns of joblessness. Earlier studies have shown that the state of being unemployed leads to a “rapid decline in life satisfaction” and that those unemployed “never return to preunemployment levels” of satisfaction with life. Using complex statistical techniques, this study tried to look for different effects of joblessness in different people. Results showed that “majority of individuals (82 percent) demonstrate no long-term effects on life satisfaction in response to unemployment.”

Trends show that in the United States and Western Europe, the rates of unemployment are rising alarmingly. With the rise of joblessness, concerns regarding the distressing effects of unemployment are also on the rise.  Early studies have shown that, apart from the financial setback that losing a job brings with it, there is also a loss in the social relationships, self esteem and self identity that accompanies the unemployed status in an individual. This study attempted to show how situations of being out of work as well as economic trends affect these other non-monetary costs and satisfaction with life in unemployed individuals.

•    A total of 774 participants (67 percent of them men) were recruited and studied from 1984 through 2003 in 20 waves or phases.
•    They were asked questions regarding employment status, sex, age, educational qualification and subjective well-being (SWB).
•    For assessment of SWB they were asked, “How satisfied are you nowadays with your life as a whole?” Participants had to rate their satisfaction with life on a scale of zero (totally dissatisfied) to 10 (fully satisfied).
•    Results show that on average unemployment causes a fall in the SWB score that never returns to the preunemployment rate, even after the passing of years.
•    However 68.8 percent of the participants coped well with job loss with little fluctuation in long-term SWB.
•    A majority of individuals also showed a return to their previous levels of SWB within one year after job loss.
•    When the effects of national economic trends was noted on the SWB of individuals, it was found that people look at national trends of unemployment while retaining their jobs when they feel satisfied at having avoided job loss. However, when there is unemployment in their close circle and national and community trends show a rise in unemployment, their SWB falls, in anticipation of job loss.

Shortcomings/Next steps
One of the limitations of the study observed by researchers was the fact that the reason for job loss was not observed for all participants and that may have affected the results. They propose further larger studies to explore the link between economic trends and self-assessed satisfaction and well-being more definitively.

With the rise of unemployment, concerns regarding the non-monetary effects of being without a job are of interest. The present study attempted to investigate the exact relationship between the state of joblessness and satisfaction with life. It showed that the majority of individuals showed a definite decline in self-assessed well-being after losing their jobs but recovered as time passed. However, for some, the level of satisfaction with life never returned to normal, even years after the loss of their jobs. Studies to this effect may help understand the psychological ill effects of job loss and the methods required to deal with them.

For More Information:
Exploration of Individual Differences in Response to Unemployment
Publication Journal: Journal of Neuroscience, Psychology and Economics, 2010
By Isaac R. Galatzer-Levy and George A. Bonanno; Columbia University, New York City

*FYI Living Lab Reports Are Summaries of the Original Research.