Coping with Unemployment: The Impact of Unemployment Duration and Personality on Trajectories of Life Satisfaction

Unemployment is a major life event that causes an enormous drop in people's life satisfaction. However, there is substantial variability in people's ability (or inability) to cope with the experience of unemployment. In the present study, we examined the causes of individual differences in trajectories of life satisfaction when people were faced with unemployment by taking into account the persistence of unemployment, pre–event personality and age. Analyses were based on data from the German Socio–Economic Panel. Using latent growth curve modelling, life satisfaction was investigated from 3 years before to 3 years after a person became unemployed in a total sample of 908 individuals. As expected, unemployment caused a substantial drop in life satisfaction that persisted for at least 3 years after the event. On average, individuals did not completely return to their previous satisfaction level. This pattern existed even for participants who re–entered the labour market. Moreover, our results showed that variability in coping with unemployment can be explained in part by personality traits. For people with short periods of unemployment, Conscientiousness reinforced the negative effect of unemployment, whereas Extraversion softened the effect. In sum, our analyses showed that (a) the negative effect of unemployment on life satisfaction differs according to the length of the unemployment period and (b) personality partially moderates responses to unemployment over time. Copyright © 2015 European Association of Personality Psychology