Is Any Job Better than No Job? Life Satisfaction and Re-employment

Abstract

Using data for West Germany from the German Socio-Economic Panel, we analyse the impact of transitions from unemployment to full-time employment on life satisfaction, with special focus on the influence of job quality. We apply various indicators of job quality (self-reported job satisfaction, wages, type of contract, and indicators of the fit between the worker and job requirements). We control for the influence of income changes and other factors affecting life satisfaction, using a conditional logit estimator. Results suggest that job quality only matters to some extent, and often people in bad jobs are still better off than those who remain unemployed. This effect is statistically significant for most indicators of job quality, except for workers with low job satisfaction and for those whose new job is much worse than their pre-unemployment job.We would like to thank Gesine Stephan, conference participants at the ISQOLS conference 2007 in San Diego, USA and the 2008 meeting of the IARIW in Portoroz, Slovenia, as well as seminar participants in Nuremberg, Göttingen and Vienna and three anonymous referees for valuable comments and suggestions on earlier versions. All remaining errors are ours.

The influence of re-employment on quality of life and self-rated health, a longitudinal study among unemployed persons in the Netherlands

“…However, although the non-native re-employed persons show a smaller increase in health compared to the native Dutch re-employed persons, they are still better of than their unemployed counterparts. This is also found by Grun et al [24], who suggests that job quality only matters to some extent, since there is evidence that persons in poor quality employment are still better off, report a higher life satisfaction, than those who remain unemployed.…”

“…Most longitudinal studies on quality of life have examined transitions from employment to unemployment, and there is less agreement about the influence of re-employment on quality of life [23,24]. A German study showed a large drop in quality of life after unemployment and an improvement after re-employment, but quality of life among re-employed persons remained below their original level many years after entering paid employment [23].…”

Four Decades of the Economics of Happiness: Where Next?

“…Here again, the evidence is pretty much unanimous: unemployment is associated with lower levels of well‐being both in cross‐sectional data (comparing one individual who is unemployed to another who is in employment) and in panel data (looking at the same individual over time as their labor‐force status changes between working and unemployment). This kind of finding was an early staple in psychology (Jahoda, ), and has made repeated appearances in the economic literature (Clark and Oswald, ; Winkelmann and Winkelmann, and Grün et al ., : see also Layard et al ., )…”

Wage Performance of Immigrants in Germany

“… The two closest papers relying on this variable are Grün et al . (), who study the relationship of life satisfaction and re‐employment, and Hajek (), who analyzes the interplay between poverty, wealth and life satisfaction. …”