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Unemployment and life satisfaction: a non‐linear adaptation process

Yannis Georgellis (Department of Economics and Finance, Brunel University, Uxbridge, UK)
Andros Gregoriou (Department of Economics and Finance, Brunel University, Uxbridge, UK)
Jerome Healy (Norwich Business School, University of East Anglia, Norwich, UK)
Nikolaos Tsitsianis (Department of Accounting, Finance and Economics, University of Hertfordshire, Hatfield, UK)

International Journal of Manpower

ISSN: 0143-7720

Article publication date: 14 November 2008

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Abstract

Purpose

The aim of this paper is to model the dynamic path of adjustment towards pre‐unemployment levels of wellbeing for a group of full‐time workers who experienced job loss.

Design/methodology/approach

Based on data from the German Socio‐economic Panel, a large‐scale panel survey, the paper captures the non‐linear nature of the adaptation process by using an Exponential Smooth Transition Autoregressive (ESTAR) model.

Findings

The study finds that adaptation takes place in a non‐linear fashion, with the speed of adjustment being higher for high earners, those with high pre‐unemployment levels of life satisfaction and those who were most satisfied with their jobs before becoming unemployed. It also finds that most of the adaptation takes place during the first year of unemployment, with adaptation speeds decreasing with unemployment duration, suggestive of possible habituation effects being present.

Originality/value

This is the first study to model the dynamic path of adjustment towards pre‐unemployment wellbeing levels as a non‐linear process. Despite the challenge posed by adaptation theory and the recent interest in the wellbeing effects of job loss, there is only sparse empirical evidence on the dynamics of the adaptation to unemployment process.

Keywords

Citation

Georgellis, Y., Gregoriou, A., Healy, J. and Tsitsianis, N. (2008), "Unemployment and life satisfaction: a non‐linear adaptation process", International Journal of Manpower, Vol. 29 No. 7, pp. 668-680. https://doi.org/10.1108/01437720810908956

Publisher

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Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited

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