Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/150929
Authors: 
Crost, Benjamin
Year of Publication: 
2011
Series/Report no.: 
SOEPpapers on Multidisciplinary Panel Data Research 384
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.
Subjects: 
Happiness
life satisfaction
unemployment
subsidized employment
JEL: 
J28
J68
Document Type: 
Working Paper

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