Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/103969
Authors: 
Kunze, Lars
Suppa, Nicolai
Year of Publication: 
2014
Series/Report no.: 
SOEPpapers on Multidisciplinary Panel Data Research 703
Abstract: 
This article examines the impact of unemployment on social participation for Germany using the German Socio-Economic Panel. We find significant negative, robust and, for some activities, lasting effects of unemployment on social participation. Causality is established by focussing on plant closures as exogenous entries into unemployment. Social norms, labor market prospects and the perception of individual failure are shown to be relevant for explaining these findings. Furthermore, our results not only (i) provide novel insights into the determinants of the unemployed's unhappiness but also (ii) highlight an hitherto unexplored channel through which unemployment influences economic outcomes, namely by altering the long-run level of social capital, and (iii) point to an alternative explanation of unemployment hysteresis based on access to information.
Subjects: 
unemployment
social participation
plant closure
fixed effects
well-being
JEL: 
J64
I31
Document Type: 
Working Paper

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