An Empirical Study on Unemployment and Life Satisfaction of 26 Transition Countries
체제전환국 주민의 실업과 삶의 만족도에 관한 실증 연구
Purpose: Utilizing three waves of the Life in Transition Survey (LiTS) conducted in 2006, 2010, and 2016, this study investigates the correlation between unemployment and life satisfaction in 26 post-socialist countries.
Originality: This research contributes to the previous literature by considering the context of transition countries. The result gives evident of the socialist legacy in the life satisfaction of their citizens in regards of unemployment.
Methodology: We regressed life satisfaction on its determinants such as macroeconomic variables, individual social characteristics, and public service satisfaction. We also applied country and year fixed effects to address common time trends across 26 countries.
Result: First, the nonpecuniary mental cost (a cost from non-monetary pressure) is larger than the pecuniary cost (a mental cost comes from loss of income) to an unemployed person. However, at the societal level, the ratio between pecuniary and nonpecuniary costs is reversed. Second, during the economic recession in 2010, the psychological loss decreased in these countries. Third, we found that the quality of public service in everyday life can be helpful to mitigate the detrimental impact of unemployment, especially for the low- and middle-income groups.
Conclusion and Implication: The subjective well-being cost of unemployment should be understood in the context of socio-economic change in the society.
In transition countries, policies to enhance the everyday public service quality for wide range of citizens, including elderlies and females, are needed to reduce the detrimental effect of unemployment.
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