Wellbeing Consequences of Unemployment and Working with a Job Dissatisfaction in Turkey

Abstract

This study aims to answer the following two questions. First, are the unemployed unhappy compared to the employed? Second, are unemployed individuals even unhappier compared to people who are unsatisfied with their job? We utilize the the Life Satisfaction Survey’s individual level data between 2004-2020 period. The LSS survey is a nationally representative survey with more than 324,000 observations in 17 years. Firstly, after controlling for household income, the unemployed have a considerably lower wellbeing than the employed. However, compared to employed people who are dissatisfied with their job, the unemployed’s wellbeing is statistically significantly higher. Thus, it appears that unemployment is a negative life event in Turkey as in elsewhere, but so is working in a toxic job. Moreover, we find strong gender effects as males and particularly married males suffer more from unemployment. Also, a quarter of the unemployed report that they feel social pressure due to unemployment. These findings suggest that social approval plays some role in the impact of unemployment. Our findings imply that societies similar to Turkey in terms of labor market would be better off with some unemployment insurance program as it signals to potential quitters that some unemployment is tolerated by society.