Labour force sequences, unemployment spells and their effect on subjective well-being set points

Drawingupon recent psychological literature, we examine the effect of employment statuses pre- and post-unemployment on levels of subjective well-being (SWB),and the return to pre-unemployment levels, i.e. set points. Data came from the British Household Panel Survey. SWB was measured using the GHQ-12 and a question on life satisfaction; Employment status was self-reported. Multilevel, jointed, piecewise, growth curve regression models were used to explore associations by gender, specifically whether different labour force sequences produced different growth curves and rates of adaptation. Overall, there was a tendency for men and women to return to well-being set points for both outcomes. However, findings showed differences by labour force sequence and SWB measure. Women who experienced unemployment between spells of employment returned to their SWB setpoint at a faster rate of return for GHQ than for life satisfaction, while for men, the rates of return were similar to each other. Women who were employed prior to unemployment and then became economically inactive showed a return to their GHQ set point, but there was no return to their life satisfaction setpoint. Economically inactive participants pre-unemployment, who then gained employment, also showed a return to their well-being set point. After economic inactivity and then unemployment, only men experienced a significant increase in life satisfaction upon return to economic inactivity. The findings showed that following unemployment, return to subjective well-being setpoint was quicker for people who became employed than for people who became economically inactive. There were also differences in the return to SWB setpoint by type of economic inactivity upon exiting unemployment.