The Effect of Unemployment on Social Participation of Spouses Evidence from Plant Closures in Germany

This paper estimates the effect of an individual’s unemployment on the level of social participation of their spouse. Using German panel data, it is shown that unemployment has a strong negative effect on public social activities of both directly and indirectly affected spouses. Private social activities of either spouse, however, are only found to increase if the indirectly affected spouse is not working. Conflict prevention strategies or habituation may help to rationalise this finding. Our results imply that active labour market policies should account for spillover effects within couples and adopt a family perspective

Unemployment: The Silent Epidemic

This paper examines two key aspects of unemployment-its propagation mechanism and socioeconomic costs. It identifies a key feature of this macroeconomic phenomenon: it behaves like a disease. A detailed assessment of the transmission mechanism and the existing pecuniary and nonpecuniary costs of unemployment suggests a fundamental shift in the policy responses to tackling joblessness. To stem the contagion effect and its outsized social and economic impact, fiscal policy can be designed around two criteria for successful disease intervention-preparedness and prevention. The paper examines how a job guarantee proposal uniquely meets those two requirements. It is a policy response whose merits include much more than its macroeconomic stabilization features, as discussed in the literature. It is, in a sense, a method of inoculation against the vile effects of unemployment. The paper discusses several preventative features of the program

Sickness absence and mental health: evidence from a nationally representative longitudinal survey

OBJECTIVES: Previous studies have consistently reported evidence of large significant associations between measures of psychological health and sickness absence. Some of this association, however, may be confounded by relevant covariates that have not been controlled. By using data with repeated observations from the same individuals, this study aimed to quantify the bias due to unobserved characteristics that are time invariant. METHODS: Longitudinal data from the Household, Income, and Labour Dynamics in Australia (HILDA) Survey were used to estimate negative binomial regression models of the number of annual paid sickness absence days. Observations spanning the period 2005-2012, and covering all employed persons aged 15-64 years, were used (56 348 observations from 13 622 individuals). RESULTS: Significant associations between the number of paid sickness absence days taken each year and scores on the mental health subscale of the SF-36 (MHI-5) were found. Inclusion of correlated random effects (which effectively control for unobserved person-specific factors that do not vary over time), however, resulted in a marked decline in the magnitude of this association. For persons with severe depressive symptoms (MHI-5 ≤52), the estimated incidence rate ratios were in the range 1.13-1.14 for men and 1.10-1.12 for women. CONCLUSIONS: Poor mental health is a risk factor affecting work attendance, but the magnitude of this effect, at least in a country where the rate of sickness absence is relatively low, is modest

The perceived well-being and health costs of exiting self-employment

We explore how involuntary and voluntary exits from self-employment affect life and health satisfaction. To that end, we use rich longitudinal data from the German Socio-Economic Panel from 1985 to 2017 and a difference-in-differences estimator. We find that while transitioning from self-employment to salaried employment brings small improvements in health and life satisfaction, the negative psychological costs of business failure (i.e., switching from self-employment to unemployment) are substantial and exceed the costs of involuntarily losing a salaried job. Meanwhile, leaving self-employment has no consequences for self-reported physical health and behaviors such as smoking and drinking, implying that the costs of losing self-employment are mainly psychological. Moreover, former business owners fail to adapt to an involuntary self-employment exit even 2 or more years after this traumatic event. Our findings imply that policies encouraging entrepreneurship should also carefully consider the nonmonetary implications of business failure