A 1pc point increase in local unemployment depresses still-working people’s well-being to a degree that’s roughly equivalent to a 4pc decline in household income, according to John F. Helliwell of the University of British Columbia and Haifang Huang of the University of Alberta, both in Canada. The apparent reason has nothing to do with workers’ feeling badly for the unemployed. Instead, rising unemployment leads people to fear they’ll lose their own jobs.
(Source: National Bureau of Economic Research)
Published in Dawn, Economic & Business, September 29th, 2014
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