There is no habituation effect with unemployment, quite the opposite
People do not adjust better to unemployment by being surrounded by other unemployed people or remaining unemployed for an extended period of time. Daniel Oesch and Oliver Lipps have analyzed how life satisfaction evolves among the unemployed in different regions of Switzerland and Germany over time. Their article will be published in the European Sociological Review.
Submitted as part of the Swiss National Center of Competence in Research LIVES, a paper published online in the prestigious European Sociological Review (with a paper edition coming out in 2013) contradicts the view that a "culture of joblessness" would make the experience of unemployment more acceptable to individuals. Based on Swiss and German panel data, two researchers from the University of Lausanne, Prof. Daniel Oesch, a member of NCCR LIVES IP4, and Dr Oliver Lipps, a senior researcher at the Swiss Center of Expertise in the Social Sciences FORS, show that the jobless do not recover from their drop in well-being as their unemployment drags on. In regions where the unemployment rate is high, the well-being of the unemployed is even lower than that of people with a similar profile living in regions where the unemployment rate is low.
According to certain economists, an individual’s motivation to find work diminishes when unemployment becomes a ‘way of life’. Longer unemployment duration or living in a region where unemployment is widespread would therefore end up making it acceptable. To encourage people to look for work, one solution would be to make unemployment less attractive. Since the social norm no longer pushes the unemployed back into work, it would be necessary to cut financial benefits in an effort to reactivate the will to work.
However, the two researchers report the opposite finding. As opposed to other critical events in life, the study shows that there is no habituation effect with unemployment in Germany and Switzerland. People who are unemployed do not become more accustomed to living as an unemployed person over time.
Regional variations over time
The Swiss data were collected by the Swiss Household Panel between 2000 and 2010. Unemployment rates ranged between 1.5% in central Switzerland, up to 6.7% for the region around Lake Geneva. In Germany, the data are even more solid: the period covered extends from 1984 to 2010 and the range of unemployment rates varies between 2.3% and 22.4%, depending on the states.
In both cases, the decline in life satisfaction is substantial. In Germany, as in Switzerland, the subjective level of well-being among the unemployed falls significantly and persists during the state of unemployment. Regions with higher unemployment rates (East Germany and French-speaking Switzerland) register lower levels of well-being than those in regions less affected by unemployment.
Daniel Oesch is not really surprised by these results, but all the same is glad that the habituation effect has not been confirmed: "Psychologists have already shown that unemployment creates suffering at the individual level, but economists have favored the hypothesis that the longer the unemployment, the less pressure there is on people seeking employment. As for sociologists, they have neglected the field of inequalities and have invested little in studies on life satisfaction. We are only beginning to see this more clearly."
"The question of unemployment is one of the rare fields where multidisciplinary approaches work really well," the researcher welcomes, expressing his wish for social policy interventions. While the study does say what must not be done – harden the living conditions of the unemployed – it only outlines possible solutions: the combination of effective retraining programs with macroeconomic policies that promote economic growth and job creation.
- Daniel Oesch and Oliver Lipps Does Unemployment Hurt Less if There is More of it Around? A Panel Analysis of Life Satisfaction in Germany and Switzerland European Sociological Review (Advance Access)