Good Benefits Don’t Make Unemployed People Happy About Being Unemployed

People really don’t like being unemployed, and having good unemployment assistance doesn’t change that

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There’s a persistent idea, which comes up often in debates over social services, that a too-generous social assistance program could make life so cushy that people would be happy to be unemployed. (This is despite the well-known psychological, health, and economic hazards of un- or under-employement, although not all of these issues stem specifically from financial shortfalls). Now, a new study by Jan Eichhorn took that idea head on, looking at rates of life satisfaction from unemployed people across the European Union. And Eichhorn found that there is no connection between how happy people are and the quality of their country’s unemployment assistance.

There is notable variation, from country to country, on how much being unemployed hurts people’s life satisfaction. And large-scale economic disparities between the countries—in GDP or the amount of income inequality—make a difference. But one factor that didn’t matter was how robust unemployment assistance programs are.

Not only does the strength of an unemployment program not affect people’s happiness, it also doesn’t affect how hard people look for new jobs when they are unemployed.

Here’s Eichhorn arguing what this all means:

It is imperative to understand that this does not disqualify welfare state payments, as there are forms of well-being not comprehensively captured in the subjective evaluations (such as material well-being or health), although there are connections between the different domains of well-being. It does mean however that claims about unemployment benefits helping to reduce the negative impact of unemployment in terms of the feeling and the subjective evaluations could not be upheld uncritically. In turn this means that claims about unemployment benefits resulting in complacent unemployed people who chose the situation and would be satisfied with it cannot be retained uncritically either.

Arguments to increase or decrease unemployment benefits therefore should not be based on discussions which use these claims as their foundation as they could not be supported empirically by this study. Other reasons need to be presented in order to justify decisions regarding unemployment benefit levels, not arguments based on discussions of systematic effects on motivation, satisfaction and complacency.

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