The name is absent

22

Further results suggest that income does not have any significant effect on experienced utility
(which is in line with Kahneman et al. 2004). People with vocational training show a
significantly higher net affect and a lower U-index than people without a vocational degree.
People with a university education show no significant difference in experienced utility
compared to people without any vocational education. Respondents who are more satisfied
with their health also report feeling better across the day. As was the case for life satisfaction,
age also has a non-monotonic impact on net affect and the U-index. The responses on how the
previous day relates to a regular day generally show the expected signs and are significant in
some cases.¹¹ In particular, people who report that their previous day was worse than a regular
day also reported significantly worse net affect and U-index scores, while people who stated
that their health situation and their experiences at work were better on the previous day than
in general report higher net affects.

5. Discussion

One of the most robust results from the life satisfaction literature is that unemployment has
long-lasting negative impacts on life satisfaction (Lucas et al. 2004). While we observe
adaptation after an increase in income (Frey and Stutzer 2002), after becoming moderately
disabled (Oswald and Powdthavee 2008), or within a few years after marriage (Clark et al.
2008), the empirical evidence shows that it is not only becoming unemployed that makes
people unhappy but also remaining in unemployment. In our study, unemployed people have
been unemployed for at least one year and report significantly lower levels of life satisfaction
than employed people. Our results are thus in conformity with previous research. We do not
have panel data and thus cannot draw definite conclusions on causality, but one possible
explanation for these results is that adaptation to unemployment with respect to general life
satisfaction is less than complete.

Comparison of these results with the findings from our DRM study shows striking
differences between different measures of well-being. While asking people about their life
satisfaction suggests that unemployment makes people unhappy, the measures of instant
utility over the course of the day do not find any significant differences in well-being between

¹¹ Respondents‘ assessments of how their work, their health, and general satisfaction on the previous day relate
to a typical day are highly correlated. This raises issues of multicollinearity so that the p-values tend to be too
large and thus have to be interpreted with caution. Since we use these variables only as controls, this does not
affect the validity of our main results.

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