Publications Based on SOEP Data: SOEPlit

Income, happiness, and the disutility of labour

We re-examine the claim that the income effect on happiness is downward biased because higher income demands more work effort. We find no evidence of an underestimation because the impact of working hours on happiness is rather small and hill-shaped.

Quantifying the psychological costs of unemployment: the role of permanent income

Unemployment causes significant losses in the quality of life. In addition to reducing individual income, it also creates nonpecuniary and psychological costs. We quantify these nonpecuniary losses by using the life satisfaction approach. In contrast to previous studies, we apply Friedman's (1957) permanent income hypothesis by distinguishing between temporary and permanent effects of income changes. ...

Scarring or Scaring? The Psychological Impact of Past Unemployment and Future Unemployment Risk

We reassess the ‘scarring’ hypothesis which states that unemployment experienced in the past reduces a person's current life satisfaction even after the person has become reemployed. Our results suggest that the scar from past unemployment operates via worsened expectations of becoming unemployed in the future, and that it is future insecurity that makes people unhappy. Hence the terminology should ...

Dissatisfied with Life but Having a Good Day: Time-Use and Well-Being of the Unemployed

We apply the Day Reconstruction Method to compare unemployed and employed people with respect to their subjective assessment of emotional affects, differences in the composition and duration of activities during the course of a day and their self-reported life satisfaction. Employed persons are more satisfied with their life than the unemployed and report more positive feelings when engaged in similar ...

Right-Wing Extremism and the Well-Being of Immigrants

This study analyzes the effects of right-wing extremism on the well-being of immigrants based on data from the German Socio-Economic Panel (SOEP) for the years 1984 to 2006 merged with state-level information on election outcomes. The results show that the life satisfaction of immigrants is significantly reduced if right-wing extremism in the native population increases. Moreover, the life satisfaction ...

Minimum Wage Incidence: The Case for Germany

This paper analyzes the impact of a statutory minimum wage on employment, wage inequality, public expenditures, and aggregate income in the low-wage sector for two scenarios: a competitive labor market and a monopsonistic labor market. Using data from the 2006 wave of the German Socio-Economic Panel (GSOEP), we show that irrespective of which scenario adequately describes the labor market, a statutory ...

Work Hour Mismatch and Job Mobility: Adjustment Channels and Resolution Rates

This paper analyses the role of job changes in overcoming work hour mismatches (i.e., differences between actual and desired work hours). It addresses two, yet neglected, questions: (1) How do adjustments in desired work hours, additionally to adjustments in actual work hours, contribute to the resolution of these mismatches? and (2) Does the well‐documented increased work hour flexibility of job movers ...

Incomplete Risk Adjustment and Adverse Selection in the German Public Health Insurance System

Aggregation and Labor Supply Elasticities

We outline a formal procedure for deriving the aggregate wage-elasticity of labor supply for a large group of heterogeneous workers who operate under uncertainty. Heterogeneity relates to preferences, income, wealth, and the labor market status. If each worker faces a small, possibly nonuniform wage change, the implied aggregate wage-elasticity can be represented by a closed-form expression. This expression ...

The Effects of Mobility on Neighbourhood Social Ties

This research examines the strength of people’s ties with close neighbours and the sensitivity thereof to changes in residential mobility, access to modes of public and private transport, and changes in the availability of modern communications technologies using the German Socio-economic Panel Study (SOEP). All forms of mobility have increased over time and are negatively associated with visiting ...