Editor Pick – Is Unemployment More Costly Than Inflation?
Is unemployment more costly than inflation?
David Blanchflower / Bank of England
Abstract:
“Previous literature has found that both unemployment and inflation lower happiness. This paper extends the literature by looking at more countries over a longer time period.[...] I find that unemployment depresses wellbeing more than inflation. The least educated and the old are more concerned about unemployment than inflation. Conversely, the young and the most educated are more concerned about inflation. An individual’s experience of high inflation over their adult lifetime lowers their current happiness over and above the effects from inflation and unemployment. Unemployment appears to be more costly than inflation in terms of its impact on wellbeing.”
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