Unemployment and (un)happiness: Life satisfaction approach to enhance policy efficiency for developing countries

Abstract

Unemployment decreases happiness in individuals’ lives, generating pecuniary and non-pecuniary costs for unemployed individuals, especially for the least satisfied or most vulnerable groups. The study investigates cognitive aspects of individual well-being among unemployed people. Based on a pooled cross-sectional dataset of 689 unemployed respondents and multivariate regression outputs, the research constructs a “vulnerability scale” and suggests the use of a “differentiated supporting system” in developing countries. The proposed system requires identifying and supporting the least satisfied unemployed individuals first, as they need that the most. Therefore, applying a differentiated supporting system can increase policy efficiency and enhance societal life satisfaction in developing countries with limited resources available for employment agencies. Use of the scale requires easily observable data (age, gender, marital status, educational attainment, and unemployment duration) and is readily reproducible in other cases. Within the conceptual framework of the “differentiated supporting system,” employment agencies can construct a measurable “vulnerability scale” for unemployed individuals and increase resource use efficiency.