Do workers accumulate resources during continuous employment and lose them during unemployment, and what does that mean for their subjective well-being?

Abstract

Drawing on cumulative advantage/disadvantage and conservation of resources theories, I investigated changes in economic, social, and personal resources and in subjective well-being (SWB) of workers as they stayed continuously employed or continuously unemployed. I considered age, gender, and SES as potential amplifiers of inequality in resources and SWB. Using 28 yearly waves from the German Socio-Economic Panel (SOEP 1985-2012), I conducted multilevel analysis with observations nested within participants. A longer duration of continuous employment predicted slightly higher economic resources and thereby slightly higher SWB over time. A longer organizational tenure had mixed effects on resources and predicted slight reductions in SWB via lower mastery. A longer duration of continuous unemployment predicted marked reductions mainly in economic but also in social resources, which led to modest SWB decreases. Younger workers, women, and workers with higher SES benefited from longer continuous employment and organizational tenure more. At the between-person level, some evidence for self-selection of less resourceful individuals into long-term or repeated unemployment emerged. The highly regulated German labor market and social security system may both dampen the rewards of a strong labor force attachment and buffer against the losses of long-term unemployment.