nep-hap New Economics Papers
on Economics of Happiness
Issue of 2011‒06‒25
one paper chosen by
Viviana Di Giovinazzo
University of Milano-Bicocca

  1. The Effect of Subsidized Employment on Happiness By Benjamin Crost

  1. 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

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