According to set-point theories of subjective well-being, people react to events, but then return to
initial levels of happiness and satisfaction over time. We test this idea by examining reaction and
adaptation to unemployment in a 15-year longitudinal study. In accordance with set-point theory,
individuals first reacted strongly to unemployment and then shifted back toward their former (or
“baseline”) levels of life satisfaction. However, on average, individuals did not completely return to
their former levels of life satisfaction, even after they became re-employed. The findings suggests
that even a short period of unemployment can cause an alteration in a person’s long-term set-point.
Within-person analyses showed, however, that there are considerable individual differences in
reaction and adaptation to unemployment. Although there was substantial stability in life
satisfaction over the years, unemployment did influence long-term levels, thus suggesting that in
addition to personality, long-term subjective well-being can also be influenced by life
circumstances
