Impact of unemployment on happiness in the United States

ABSTRACT

This study considers the level of demonstrated happiness and unhappiness, the latter measured by the conditional probability of committing suicide within groups that are facing a higher unemployment rate and those that are not. Using individual-level US data from 1989 to 2004, our findings indicate that individuals have lower rates of suicide or are ‘happy’ when they live in a state that has lower unemployment rate.

KEYWORDS:

• Unemployment
• happiness
• suicide
• mortality

JEL CLASSIFICATION:

• A10
• I12
• J17

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Among many others, refer to Daly, Wilson, and Johnson (2013) for the study of this issue in the US, Bokerman and Ilmakunnas (2009) for Finland, and Ahn, García, and Jimeno (2004) for Denmark and Netherlands. Also, see Hamermesh and Soss (1974) for theoretical model on this topic.

² See Milner et al. (2013) and Oyesanya, Lopez-Morinigo, and Dutta (2015) for a survey of literature on suicide.

³ Data link: http://www.nber.org/data/vital-statistics-mortality-data-multiple-cause-of-death.html.

⁴ We also run separate regressions for each year within our sample in which case state dummies cannot be included because unemployment rate is invariant within state. In these cases, the coefficient on unemployment rate is always negative. When compared to the pooled logit results reported here, such negative coefficients could stem from state-level unobserved heterogeneity.

⁵ The results are consistent when incorporating the state-level deaths due to mental illness.