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Scarring: The Psychological Impact of Past Unemployment
Author(s) -
Clark Andrew,
Georgellis Yannis,
Sanfey Peter
Publication year - 2001
Publication title -
economica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.532
H-Index - 65
eISSN - 1468-0335
pISSN - 0013-0427
DOI - 10.1111/1468-0335.00243
Subject(s) - unemployment , german , panel data , life satisfaction , economics , demographic economics , psychology , labour economics , psychological well being , panel survey , social psychology , economic growth , geography , econometrics , archaeology
This paper considers the psychological impact of past unemployment. Using 11 waves of German panel data, we show that life satisfaction is lower not only for the current unemployed (relative to the employed), but also for those with higher levels of past unemployment. However, the negative wellbeing effect of current unemployment is weaker for those who have been unemployed more often in the past. The panel data also reveal some evidence that those suffering greater falls in wellbeing on entering unemployment are less likely to remain unemployed one year later. Together, these findings offer a psychological explanation of persistent unemployment.