This paper considers the psychological impact of past unemployment. Using 11 waves of German panel data, we show that life satisfaction is lower not only for the current unemployed (relative to the employed), but also for those with higher levels of past unemployment. However, the negative...

We look for evidence of habituation in twenty waves of German panel data: do individuals tend to return to some baseline level of well-being after life and labour market events? Although the strongest life satisfaction effect is often at the time of the event, we find significant lag and lead...