Unemployment, Trust in Government, and Satisfaction with Democracy: An Empirical Investigation

Abstract

Evidence suggests that unemployment negatively affects various aspects of individuals’ lives. The author investigates whether unemployment changes individuals’ political evaluations in the form of trust in government and satisfaction with democracy. While most research in this area operates on the macro level, the author provides individual-level evidence. In doing so, the author investigates the assumed causal link with panel data from Switzerland and the Netherlands. In addition, the author studies the impact on life satisfaction, a “control outcome,” known to be affected by unemployment. Although there is strong evidence that changes in employment status do affect life satisfaction, effects on trust in government and satisfaction with democracy seem mostly absent or negligible in size.