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life satisfaction than the employed (e.g., Clark and Oswald (1994), Winkelmann and
Winkelmann (1998), Di Tella et al. (2001), Clark (2003), and Blanchflower and Oswald
(2004)). The results of our survey are in line with these findings. We also asked respondents
to assess their life satisfaction on a scale from 0 to 10. The employed reported an average
value of 7.11, the unemployed stated an average value of only 4.58 (Table 4). The difference
of 2.53 points is statistically significant at any reasonable level.
Does such a difference also show up in the day-to-day experiences of employed and
unemployed people? The measures of momentary experienced utility we derived in Section
2.1 show striking differences compared to the reported general life satisfaction. The results
are listed in Table 4, which shows the duration-weighted averages for the net affect, the U-
index, and episode satisfaction. An employed person’s average net affect is 4.23. This value is
far below the net affect score reported for most activities (see Table 2), but seems to be driven
by the large share of time allocated to working and related activities. The unemployed report a
score of 4.24. Measured by the duration-weighted net affect, the unemployed do not feel
unhappy, but are in fact as happy as the employed. If we look at the U-index, the employed
have an index value of 0.15, and the unemployed of 0.17. On average, the unemployed report
that their strongest feeling is a negative one for only 2 percent more of their time than the
employed. The null hypothesis that the two values are equal cannot be rejected. Our measure
of episode satisfaction also shows no significant difference between the two groups. The
duration-weighted average episode satisfaction is 7.23 for the employed and 7.04 for the
unemployed. The difference of 0.19 points is not statistically significant either.
The differences in momentary experienced utility between the employed and the
unemployed depend on two effects. The first (saddening) effect is the difference in
experienced utility during each activity. As we know already from the results in Table 2, the
unemployed report lower well-being scores in almost all activities. The second (time-
composition) effect concerns how much time a person allocates to each activity. As reported
in Table 2, the unemployed do not spend any time on the relatively undesirable activity work,
but allocate more time to other, perhaps more enjoyable, activities. Indeed, unemployed
persons spend more time socializing, which is one of the highest-values activities. Even
though they also spend more time in less-liked tasks, such as job seeking or housework, the
overall time-composition effect gives a larger weight to activities with good emotions.