COVID-19 Infections, Labour Market Shocks, and Subjective Well-Being
Ferdi Botha and John P. de New.
The COVID-19 pandemic has had substantial adverse effects on the health and well-being of individuals worldwide. In this paper, we consider subjective-being as an individual outcome, with subjective well-being denoting an umbrella term for positive and negative affect, life satisfaction and domain satisfactions. The subjective well-being components considered in this paper are satisfaction with life overall, finances, family life, family health, own health, and health services. Based on a world-wide online survey of almost 5,700 respondents, this is the first paper to present new findings on how adverse labour market impacts and infections within the household, both directly due to COVID-19, are associated with reported subjective well-being in Australia, Germany, UK, US, Italy, and Spain. Directly due to COVID-19, experiencing either (i) reductions in salary and working hours, or (ii) becoming unemployed or having to file for unemployment benefits are associated with lower satisfaction with life in general, family life, family health, health services, and finances. The relationship is largest for financial satisfaction. Persons in households that have experienced a COVID-19 infection, either themselves or another household member, report lower levels of satisfaction with life, health, family life, and finances. Labour market shocks also appear to be much more important in explaining subjective well-being as compared to COVID-19 infections. This may in part reflect the fact that factors such as job loss are associated with long-term psychological scarring and financial shocks, and that persons who are the most ill are not captured in the survey. Continuous job creation programs will be essential as part of the recovery from the pandemic as, although temporary transfer payments are helpful in mitigating the adverse effects of the pandemic, sustainable employment will go a long way in improving people’s subjective well-being.
August 27, 2020