Effects of Household Joblessness on Subjective Well-Being

Melbourne Institute Working Paper No. 10/06

Date: April 2006


Rosanna Scutella
Mark Wooden


It is widely assumed that the economic and social costs that unemployment gives rise to must be exacerbated where joblessness is concentrated within families and neighbourhoods. This hypothesis is tested in this paper. Specifically, data from the first three waves of the HILDA Survey are used to test whether jobless individuals score worse on two indicators of well-being - a measure of overall life satisfaction and a measure of mental health - when they live in households with other jobless people. Consistent with a wealth of previous research, unemployment is found to be associated with lower levels of well-being, but there appears to be very little additional disadvantage that stems from being both unemployed and living in a jobless household. Females involved in home production and not actively searching for work are the only group for whom it can be confidently concluded that the situation of the household matters.

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