engaged in during the course of that day, their general life satisfaction and their general life
circumstances. This enables us to compare unemployed and employed people with respect to
i) differences in the assessment of general life satisfaction, ii) the differences in the
assessment of emotional affects, iii) the differences in the composition of activities during the
whole course of the day, and iv) the difference in the duration of these activities.
Our results first show that unemployed persons report substantially lower levels of
satisfaction with their lives in general. We also find that employed people rank working and
work-related activities among the least enjoyable activities but experience more positive
feelings than the unemployed when engaged in similar activities. These results are in line with
previous research.
However, when measuring a person’s experienced utility with the integral over the instant
(or momentary) utility over the course of the day (Kahneman et al. 1997, Kahneman 1999),
we find that an unemployed person’s experienced utility does not differ from that of an
employed person. The unemployed are able to compensate the utility gap from the time spent
in similar activities by using the time during which the employed have to work for more
enjoyable activities. The two distinct effects - the saddening effect and the time-composition
effect - become particularly transparent when we consider Sunday and working days
separately. On Sunday, when the time-composition effect is not at work, the employed people
report higher experienced utility than the unemployed while on weekdays these differences
are almost wiped out. These results show up for three different measures of the momentary
experienced utility that take the duration of the activities into account: the net affect
(Kahneman 1999), the U-index (Kahneman and Thaler 2006), and a duration-weighted
measure of episode satisfaction.
The apparent paradox that people are unhappy because they are unemployed but happy to
spend their time in other ways than working may be explained by the way in which people
adapt to unemployment. Our results suggest that unemployment does not cause people to
adapt their aspirations. They continue to consider “being in employment” as a desirable and
meaningful part of their life. However, unemployed people face hedonic adaptation in so far
as they become used to changing life circumstances in their day-to-day experiences. The
driving force for hedonic adaptation is the opportunity to use the time in a way that yields
higher levels of satisfaction than working and work-related activities.