The 2007–2009 recession pushed unemployment to new highs in many industrialized countries, and a recovery is not yet in sight. Unemployment lower people’s life quality, and also influence their satisfaction of life. When social medias report and complain about the bad economy, they are often referring to one of two things: inflation or unemployment. - Inflation ( increase in price level of goods and services) - Unemployment (is a measure of the prevalence of unemployment individuals all individual currently in the labor force)

1. THE RELATION BETWEEN LIFE
SATISFACTION AND
UNEMPLOYMENT
THEO PAUL SANTANA
SHANGHAI JIAOTONG UNIVERSITY

2. Introduction
The 2007–2009 recession pushed unemployment to
new highs in many industrialized countries, and a
recovery is not yet in sight. Unemployment lower
people’s life quality, and also influence their
satisfaction of life.
When social medias report and complain about the
bad economy, they are often referring to one of two
things: inflation or unemployment.
- Inflation ( increase in price level of goods and
services)
- Unemployment (is a measure of the prevalence
of unemployment individuals all individual
currently in the labor force)

3. Data
- From these data, I will try to identify the
macro (country-level) factors influencing the
strength of the relationship between the
unemployment status, or inflation rate and
the level of individual wellbeing.
- In other words, I will try to analysis why in
some countries the decrease of the life
satisfaction among youth due to the
unemployment and the inflation rate is bigger
than in the others.
- Unemployment may affect expected
discounted life-time earnings (Pissarides,
1992) and (Arulampalam, 2001), which in turn
may affect current life satisfaction.
- Unemployment may affect life-time earnings,
as well as current income, and thus we may
observe a negative relationship between
unemployment and life satisfaction because
we have not controlled for permanent income.

4. Methodology
To prove the correlation between life satisfaction and
unemployment, I suppose a basic regression of the
form: Life Satisfaction = α+β Unemployment, where
unemployment is the unemployment rate in Europe
countries.
- first stage, I prove the possible relation between the
two variables, life satisfaction and unemployment rate,
by estimate curve.
- second stage regression, these life satisfactions of
Europe countries are the dependent variable.
Regression of table will explain the studies of data,
and shows that unemployment make negatively and
significantly effects on life satisfaction.

5. Descriptive Analysis
The data source and the sample used in the
analysis followed by a descriptive analysis of the
main variables of interest and the control variables.
The data used for analysis stem from The Happy
Planet Index (HPI), which is a measure of
sustainable wellbeing.
It compares how efficiently residents of different
countries are using natural resources to achieve
long, high wellbeing lives.
They use experienced wellbeing index to justify
people’s satisfaction to life.
All data on experienced wellbeing drawn from
responses to the ladder of life, which asks samples
of around 1,000 individuals aged 15 or over in each
of more than 150 countries.

6. Sampling
Experienced wellbeing: the average of all responses
from within the population to the following question:
“Please imagine a ladder with steps numbered from
zero at the bottom to 10 at the top. Suppose we say
that the top of the ladder represents the best possible
life for you; and the bottom of the ladder represents the
worst possible life for you. On which step of the ladder
do you feel you personally stand at the present time,
assuming that the higher the step the better you feel
about your life, and the lower the step the worse you
feel about it? Which step comes closest to the way you
feel?”
This measure of wellbeing is commonly used as an
indicator of how people’s lives are going overall.

7. The well-being account in 2016 of 19 Europe countries
unemployment rate

8. Through estimation
curve, we see two
variables are
related on some
degree:

9. Through regression
analysis, we get
results as
following:
The whole sample and all control variables
used in the regression analyses, these tables
suggest that there is a clear negative effect
of unemployment on life satisfaction.

10. Conclusion
This study shows that unemployment does have
negative effects on people’s life satisfaction
Also influence their satisfaction to life. There is now
persuasive evidence that unemployment, on
average, is associated with large and lasting
reductions in happiness.
My study just provides only a brief explanation of
unemployment affecting on well-being
Furthermore, the other possible factors can also be
explored in more details, such as inflation, GDP, tax
rate, in other word, life satisfaction can be
influenced by several or all of the other factors.

11. References
Theo Paul Santana
theops2@gmail.com
+8613611996578
www.theosantana.com
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Arulampalam, W. (2001). Is Unemployment Really Scarring? Effects of
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