| Abstract: |
Di Tella et al. (2001) show that temporary fluctuations in life satisfaction
(LS) are correlated with macroeconomic circumstances such as gross domestic
product, unemployment, and inflation. In this paper, we bring attention to
labour market measures from search and matching models (Pissarides 2000). Our
analysis follows the two-stage estimation strategy used in Di Tella et al.
(2001) to explore sectoral unemployment levels, labour market tightness, and
matching efficiency as LS determinants. In the first stage, we use a large
sample of individual data collected from a continuous web survey during the
2007-2014 period in the Netherlands to obtain regression-adjusted measures of
LS by quarter and economic sector. In the second-stage, we regress LS measures
against the unemployment level, labour market tightness, and matching
efficiency. Our results are threefold. First, the negative link between
unemployment and an employee's LS is confirmed at the sectoral level. Second,
labour market tightness, measured as the number of vacancies per job-seeker
rather than the number of vacancies per unemployed, is shown to be relevant to
the LS of workers. Third, labour market matching efficiency affects the LS of
workers differently when they are less satisfied with their job and in
temporary employment. No evidence of this relationship has been documented
before Our results give support to government interventions aimed at
activating demand for labour, improving the matching of job-seekers to vacant
jobs, and reducing information frictions by supporting match-making
technologies. |