Happy people are less likely to be unemployed: psychological evidence from panel data

Publication type

Journal Article

Published in

Contemporary Economic Policy


Dusanee Kesavayuth and Vasileios Zikos

Publication date


There is a large literature showing that unemployment reduces people's well-being. Yet little is known about the reverse possibility, namely that well-being itself may influence unemployment propensity. Understanding the potentials of human well-being in relation to unemployment is important as many developed countries are currently facing high unemployment rates. As well-being is likely to be endogenous, we use British panel data and implement Lewbel's novel empirical approach for identification. We show that higher well-being implies a negative causal effect on the probability of being unemployed. The result holds for two very different well-being measures: life satisfaction and a 12-item scale of mental health. As such, it provides new empirical evidence on the causal link between well-being and unemployment propensity.

Volume and page numbers

36, 277-291






Psychology, Unemployment, Well Being and Health


Not held in Hilary Doughty Research Library - bibliographic reference only

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