How does unemployment affect our wellbeing? What can reduce the damaging effects of unemployment? What happens to wellbeing when people (re)enter work?
The big picture
People who lose their jobs lose their incomes. But what are the broader effects
of unemployment on the wellbeing of individuals and their families?
Wellbeing measures how people feel about their lives, their own report of how
things are going. The wellbeing measures considered in the studies in this review
include life satisfaction, assessments of mental health, and self-esteem.
Unemployment is one of the most important factors affecting individual wellbeing,
with negative impacts going beyond the effects on income. When measuring life
satisfaction on a 0-10 scale, the unemployed report about 0.5 points lower
compared to those who are in employment. However, the effects are different for
different groups in different contexts.
Studies were included
Your self-worth can really be affected if you’re not enjoying your job.
- Public dialogue participant, Cardiff
CloseThe big picture
Where you see the following symbols it indicates:
We can be confident that the evidence can be used to inform decisions.
We have moderate confidence. Decision makers may wish to incorporate further information to inform decisions.
We have low confidence. Decision makers may wish to incorporate further information to inform decisions.
Unemployment is damaging to people’s wellbeing
Regardless of their age, gender, level of education, ethnicity or part of the country in which they live. The longer the time unemployed, the worse the effect.
People do not adapt to unemployment.
Their wellbeing is permanently reduced.
Men’s wellbeing is more affected
By the incidence and duration of unemployment.
Wellbeing may decline further for young people
Particularly if the spell of unemployment is longer.
Unemployment not only affects the person who lost their job
It also reduces the wellbeing of their spouse, especially female spouses.
How do we turn this evidence into action?
Prioritise long term and youth unemployed
The evidence is clear that unemployment is damaging to wellbeing, with the effects going well beyond the loss of income and also affecting other household members. Interventions aimed at mitigating this should be targeted at all those experiencing unemployment but priority given to long term unemployed and youth unemployed, where the loss in wellbeing and potential for scarring is greatest.
Reduce the negative impacts
Evidence suggests the priority lies with increasing employment. There could also a role for decreasing the negative experiences of the unemployed. This evidence suggests there could be a role through improving employability or recognising the importance of family and social connections.
Focus on quality jobs
The evidence confirms that wellbeing recovers on reemployment, but the size of the rebound depends on the quality of the new job. Thus as well as helping the unemployed back into work, policy has a role in promoting good quality, sustainable jobs (for example, through accreditation).