| By: |
Benjamin Crost |
| Abstract: |
While a large body of evidence suggests that unemployment and self-reported
happiness are negatively correlated, it is not clear whether this reflects a
causal effect of unemployment on happiness and whether subsidized employment
can increase the happiness of the unemployed. To close this gap, this paper
estimates the causal effect of a type of subsidized employment projects -
Germany's Arbeitsbeschaffungsmaßnahmen - on self-reported happiness. Results
from matching and fixed effects estimators suggest that subsidized employment
has a large and statistically significant positive effect on the happiness of
individuals who would otherwise have been unemployed. Detailed panel data on
pre- and post-project happiness suggests that this effect can neither be
explained by self-selection of happier individuals into employment nor by the
higher incomes of the employed. |
| Keywords: |
Happiness, life satisfaction, unemployment, subsidized employment |
| JEL: |
J28 J68 |
| Date: |
2011 |
| URL: |
http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp384&r=hap |