A recent study, "The Bitter Taste of Unemployment: Evidence from Plant Closures and Layoffs," provides crucial insights into the emotional effect of job loss and unemployment. Conducted by Christopher Prömel and Max Steinhardt from Freie Universität Berlin, the research uses data from a large-scale German survey dataset to uncover a direct link between unemployment and the distinct feeling of "bitterness."
The findings challenge a simple understanding of unemployment as solely a financial hardship. Rather than just leading to general unhappiness, the study shows that being out of work directly causes a specific form of emotional distress: a sense of not having achieved what one deserves compared to others. This feeling is separate from simple life dissatisfaction and is a significant and substantial consequence of job loss.
The study focuses on establishing a causal link, not just a correlation. To do this, the researchers used a rigorous approach, analyzing data from over 72,000 working-age individuals in Germany. They specifically looked at people who lost their jobs due to involuntary events, namely plant closures and dismissals, which helps to isolate the effect of unemployment from other personal factors.
The research found that involuntary unemployment leads to a significant increase in bitterness. Interestingly, the bitterness comes from both the experience of losing a job and the state of being unemployed. The effect is not static; it intensifies the longer a person is out of work. The study also found that even people who lost their jobs but immediately found a new one still experienced an increase in bitterness, although the effect was less severe than for those who remained unemployed. For those who remain jobless for over a year, this bitter feeling can have significant and persistent long-term effects.
This research stands out for its methodology. By leveraging involuntary job losses, the study is able to make a strong case for a causal relationship, which is a key advancement in understanding the non-monetary costs of unemployment.
The paper carries valuable lessons for policymakers and mental health professionals. The results suggest that the emotional burden of unemployment—specifically the feeling of bitterness—is a serious and lasting consequence that should be addressed in public support systems. Furthermore, the authors note that bitter people tend to express more worries about immigration and are more likely to support far-right political parties, highlighting the social relevance of their findings.
About the authors
Christopher Prömel
Economist and post-doctoral researcher at the Economics department of the John F. Kennedy Institute at Freie Universität Berlin. His research interests include the economics of migration, labor economics, and political economy.
Max Steinhardt
Professor of Economics at Freie Universität Berlin and research fellow of IZA, Centro Studi Luca D’Agliano, RFBerlin and GLO. His primary research interests are in labor economics, political economy, economics of migration, and U.S. economic policy. In his works, he has addressed classical labor market topics such as the impact of immigration on native wages or the role of income for subjective well-being as well as various questions dealing with the integration of immigrants.
