Heterogeneous Effects of Youth Unemployment on Well-Being

It is well-known that job loss and unemployment depress the subjective well-being and mental health of those affected with long-term scarring effects especially in the case of youth unemployment. The causality of such effects has been confirmed by a (small) set of longitudinal studies. Although the consequences of unemployment on well-being and health have been extensively researched, the available work has paid only limited attention to the question of whether unemployment has different effects on different groups of people. This paper draws on original data collected in the frame of the JuSAW Study that focuses on young adults (ages 18-28) who have become unemployed in Vienna in the 2nd quarter of 2014, when they were recruited at the AMS (public employment services) to take part in wave 1 of a panel survey (inflow sample into unemployment, N=1,246). One year later (2nd quarter of 2015) the same sample of young adults was re-interviewed (wave 2 of the panel survey). Using the cross-sectional data we test 1) whether past unemployment shows scarring effects on present well-being, 2) whether subjective employability plays a protective role, and 3) whether such effects vary between socio-economic groups (by sex, education, work values, and personality). Using the panel data, that have been merged with high-qualtiy register data, we test the causality of effects focusing on 1) the effect of unemployment duration and 2) the effect of re-employment on subjective well-being and health.