The impact of unemployment on cognitive, affective, and eudaimonic well-being facets: investigating immediate effects and short-term adaptation

Abstract

While long-lasting declines in life satisfaction following unemployment have been well documented, evidence on the impact of unemployment on affective and eudaimonic well- being is scarce. Moreover, most existing studies relied on yearly panel data and were unable to separate the immediate effects of entering unemployment from prospective effects occurring before individuals become unemployed. The present study identified the immediate effects of entering unemployment on cognitive, affective and eudaimonic well-being facets using a control-group design based on monthly panel data of initially employed German jobseekers who were at high risk of losing their job. In order to investigate patterns of short-term adaptation, the study further examined whether average well-being levels change within the first months of unemployment using a mixed-effects trait-state-occasion model. All effects were separately computed for jobseekers affected by mass-layoffs or plant closures and individuals who registered as jobseekers due to other reasons. Multi-item instruments and experience sampling were used to validly measure the various well-being facets. The results indicate that life satisfaction and income satisfaction significantly decreased for individuals affected by mass-layoffs or plant closures from the last month in employment to the first month in unemployment. For individuals who registered as jobseekers due to other reasons, these effects were smaller and not significant in the case of life satisfaction. Crucially, there were no immediate effects of entering unemployment on the examined affective and eudaimonic well-being facets. Moreover, well-being levels were generally stable within the first months of unemployment indicating a general absence of short-term adaptation.