Do People Suffer From Unemployment in Their Everyday Life, or Only When Asked About It?

An important question that has concerned psychologists and economists alike is how unemployment affects individual happiness. While this question is easily posed, answering it requires a definition of “happiness.” Certainly, everyone might have their own definition. After all, what could be more subjective?

Nevertheless, there are some standard ways happiness researchers rate how happy people are. The simplest way is to ask people how satisfied they are with their life, using a scale from 0 to 10. This concept of happiness—called cognitive well-being—makes people reflect on and evaluate their life as a whole. But emotional well-being is something different: it captures the frequency of a person’s positive and negative emotional states.

“Labor Is Glorious!”—Social Norms And Cognitive Well-Being

To respond to the life satisfaction question, people have to consider the elements that make up a satisfying life (a house? a job? a family?) and think about where they are, relative to their aspirations. In this thoughtful process, a person’s personal background, the expectations of others, and cultural standards may strongly influence how they judge their happiness.

Becoming unemployed not only means that one has less income, it also makes the ideal life seem farther away. Thus, many studies have shown that the unemployed are substantially less satisfied with their lives.

Does “Glorious Labor” Always Translate Into Contentment At Work?

While the status of “being employed” is evidently an important ingredient of a satisfied life, actually spending time at work is typically not very enjoyable. In a recent study, we examined data from the UK Time-Use Survey and compared employed to unemployed people. The employed people rate working and commuting to and back from work among the least enjoyable activities.

Happiness researchers often measure emotional well-being by asking people to write down each day: (1) what they did during the day, (2) how much time they spent on the different activities, and (3) how much they enjoyed each of these activities (by reporting the strength of their positive and negative emotions).

In our study, when we calculate daily average enjoyment, with longer activities weighing more than shorter ones, we find that the employed have lower average daily enjoyment than the unemployed. While having a job might be desirable, actually having to work reduces average emotional well-being.

How Are People Spending Their Time?

The diary data allow us to compare how employed and unemployed people use the 24 hours of the day. As one might expect, their use of time differs remarkably.

Including both part- and full-time workers and considering both weekdays and weekend days, the employed spend more than five hours each day on work, work-related activities, and commuting. Meanwhile, the unemployed sleep longer, do more household chores, and entertain themselves more. They also volunteer more, spend more time searching for jobs, and attend more training programs.

In the UK, therefore, we see that the way people spend their time makes for big differences in emotional experiences. Unemployed people devote much more time to leisure and entertainment (which rank among the most enjoyable activities), while employed people have to spend their time at work (which is seen as one of the most unpleasant experiences).

Consequently—and in contrast to the findings on life satisfaction—we do not find much evidence for the suffering of the unemployed when examining their emotional well-being in day-to-day life. Instead, the ability to spend their time freely gives them the chance to enjoy their day to the same extent (or even more) than their employed counterparts, regardless of their lower life satisfaction.

So… Unemployment Isn’t So Bad After All?

Don’t misread us as saying that individuals, employers, or policymakers do not need to worry about unemployment. Quite the contrary, there is hardly anything else that harms life satisfaction as much as becoming unemployed. And of course money is important for paying rent and buying groceries.

Nevertheless, when thinking about what happiness is and what its ingredients are, it is important to understand that certain aspects of life play a bigger role for a general evaluation of one’s life circumstances than they do for everyday experiences. Most unemployed people seem able to enjoy their days. But when asked to reflect on their lives, they immediately remember it again—and suffer.

For Further Reading

Hoang, T. T. A., & Knabe, A. (2021). Time use, unemployment, and well-being: An empirical analysis using British time-use data. Journal of Happiness Studies, 22(6), 2525-2548. (DOI: https://doi.org/10.1007/s10902-020-00320-x)

Knabe, A., Rätzel, S., Schöb, R., & Weimann, J. (2010). Dissatisfied with life but having a good day: Time‐use and well‐being of the unemployed. The Economic Journal, 120(547), 867-889. (DOI: https://doi.org/10.1111/j.1468-0297.2009.02347.x)

Hoang, T. T. A., & Knabe, A. (2021). Replication: Emotional well-being and unemployment–Evidence from the American time-use survey. Journal of Economic Psychology, 83, 102363. (DOI: https://doi.org/10.1016/j.joep.2021.102363)

An Hoang is a doctoral research fellow in the Faculty of Economics and Management at the Otto von Guericke University Magdeburg (Germany). Her research interests lie in the economics of well-being and labor economics, particularly in the relations between multiple dimensions of well-being, time-use and labor market status.

Andreas Knabe is professor of economics at the Otto von Guericke University Magdeburg (Germany). His research areas are public economics, labor markets, and social policy.