Jobless, Friendless and Broke: What Happens to Different Areas of Life Before and After Unemployment?

Abstract

Using a nationally representative longitudinal dataset of the British people, this paper explores how different areas of a person's life evolved before and after unemployment. There is evidence that unemployment is preceded, on average, by a year of dissatisfaction with one's finance and job, for both genders. Having entered unemployment, men and women reported a significant and persistent drop in satisfaction with finance and social life, which perhaps explains why there is little overall hedonic adaptation to unemployment. This paper proposes a two‐layer model to study leads and lags in life satisfaction to changes in employment status.