Unemployment and Well-Being

Abstract

Research by psychologists and others has consistently found that employees experience better psychological wellbeing than those who are unemployed. This finding has proven remarkably robust across time and across countries, and seems to affect all groups regardless of their age, sex or social class. Finding a theoretical framework to understand the negative psychological consequences has, on the other hand, generated a lot of controversy despite many decades of serious research on the subject. There is consensus that unemployment cannot be understood in simply economic terms, but requires psychological insight. Some theorists have focused on the good things about being in paid work, others on the distinctly negative things about unemployment. This chapter will describe some of the most influential theories, and how well they are supported by empirical evidence, before considering their applicability in a wider variety of settings. The theories were generated in a time when employment in industrialised countries was more homogeneous; people went to the factory or office, worked and then went home. Now many employees' lives have moved beyond this. The shift away from manufacturing to service industries combined with the internet and mobile technologies such as laptops and phones have softened the boundaries around workplaces so that employees can increasingly work from anywhere. And the rise of zero-hour contracts and other flexible forms of work scheduling have detracted from the security and predictability of paid work that is central to many psychological theories of wellbeing. A growing awareness of the very different labour markets that exist in developing countries, where the boundaries between employment, self-employment and work within the family have also challenged the applicability of our understanding of employment and unemployment. This chapter will provide a solid coverage of the conventional material in this area as well as a critical analysis of its global applicability in the 21st century.