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Business, Management and Economics » "Unemployment - Perspectives and Solutions", book edited by Yang Liu, ISBN 978-953-51-3432-9, Print ISBN 978-953-51-3431-2, Published: August 23, 2017 under CC BY 3.0 license. © The Author(s).

Chapter 3

Unemployment Normalization in Different Economic Contexts

By Claude Houssemand and Anne Pignault
DOI: 10.5772/intechopen.69817

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F1 differencies for socioeconomic variables. F2 differencies for socioeconomic variables.
Graph 1. F1 differencies for socioeconomic variables. F2 differencies for socioeconomic variables.
Structural equation model of the two factors in the individual experience of unemployment.
Figure 1. Structural equation model of the two factors in the individual experience of unemployment.
First structural paths model of the experience of unemployment and well‐being.
Figure 2. First structural paths model of the experience of unemployment and well‐being.
Second structural paths model of the experience of unemployment and well‐being.
Figure 3. Second structural paths model of the experience of unemployment and well‐being.

Unemployment Normalization in Different Economic Contexts

Claude Houssemand1 and Anne Pignault1, 2
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A recent strand of research has raised the question of whether a change is underway in the relationships that people have with work and nonwork. This body of work suggests that the manner in which people view unemployment and not working is changing. This chapter pursues and clarifies the first results of this research. The authors hypothesize a process of unemployment normalization, defined as the view that unemployment is a normal or even inevitable phase of life in a person’s career path and is the result of external circumstances rather than personal ones. This was tested with 600 unemployed people in two different economic contexts—France and Luxembourg—using a scale that revealed two latent factors: Justification for current unemployment situation and Perceived normality of unemployment. The findings reveal differences in the degree of normalization according to socioeconomic variables as well as an impact on the perceived health of the unemployed.

Keywords: unemployment, norm, subjective well‐being, differential approach, economic contexts, Europe

1. Introduction

For years, many studies have showed that the unemployed have significantly lower subjective well‐being (SWB) than the employed (e.g., [13]), but more recently, it appears that this gap is even greater where stronger work norms exist [4].

The expression “social norms” has been commonly and broadly used for decades—notably in research in social psychology—to help explain human behavior (e.g., [57]). In its broadest sense, a norm “might be regarded as any rule of behavior” ([5] p. 1494). A great deal of research today, therefore, distinguishes between injunctive norms, which refer to the social approval or disapproval of behavior and include sanctions, and perceived or subjective norms, which refer to a subject’s perception of the right behavior [710]. These studies highlight the influence of such norms on behavior and point toward the process of normative influence.

In 2003, Clark [11] suggested considering a given (un)employment norm within each reference group (at regional, couple, and household levels) in order to better understand the way the unemployed experience and cope with unemployment. He concluded his study with the observation that “unemployment always hurts, but it hurts less when there are more unemployed people around” (p. 346). A few years later, using German data from 1984 to 2006, Clark et al. [12] identified a “social norm effect of unemployment” (p. 7), albeit with a somewhat more nuanced result for women. Here again, indeed, the authors show that a high regional unemployment rate negatively affects the employed (for example by increasing the feeling of job insecurity) but has the opposite effect on the unemployed; unemployment then appears to be more bearable if it also affects others.

Nevertheless, also using data from Germany, Chadi [13] has clarified, or even contradicted these results. He does not invalidate the existence of a social norm effect but demonstrates that it has more of an impact on the way people view living off public funds (which is perceived as less uncomfortable if others of the reference group are in the same situation). Conversely, in terms of (un)happiness, the author shows that a high unemployment rate affects people negatively and explains this result by the fact that the unemployed have even more difficulty foreseeing their return to work in such contexts.

More broadly, using data from 45 European countries, Stam et al. [14] compare the subjective well‐being of 22,440 men and 28,494 women from five different (un)employment status categories: “employed,” “homemaker,” “retired,” “non‐working disabled,” and “unemployed”. In this study, the social norm to work is measured using five items related to work ethic, and the authors also consider the unemployment rate and the gross domestic product (GDP) of the country. They conclude that the unemployed have the lowest well‐being index scores and that, among them, men seem to suffer more than women do. In their view, neither the social norm nor even the unemployment rate or the GDP affects the well‐being of the unemployed.

In line with such studies which seek to better determine the effect of a potential social norm of unemployment, Buffel et al. [15] point the lack of clarity surrounding the way this “new” norm is defined and the limit for taking into account regional unemployment rates. They then attempt to define the features of unemployment and account for its circumstances by distinguishing between displaced versus nondisplaced unemployed individuals. They also suggest refining the measure of health by considering mental healthcare use (in particular, consultations and taking medication for anxiety and depression; p. 7). Based on their analysis of data collected between 2010 and 2012 in 16 European countries (Survey of Health, Ageing and Retirement in Europe (SHARE)), the authors show that job seekers—whether or not they have been displaced—are in poorer health than employed people; in contrast, the employed are more often depressed in regions where the unemployment rate is higher; finally, displaced men tend to be less adversely affected by unemployment than women and they also use less medication. They emphasized the need to consider other features of unemployment and the unemployed to describe the social norm effect of unemployment and show that classification by “region” is not necessarily representative of a given reference group.

All of these recent studies tend to highlight a change in the way unemployment is perceived and experienced. The results also show the need to take into account socioeconomic variables (such as age, gender, circumstances of job loss, unemployment benefits, and the country’s economic situation) to more precisely determine the job seekers’ current relationship to unemployment and the impact of this unemployment situation in terms of subjective well‐being. However, the criteria used to determine the “social norm of unemployment” (e.g., work ethic, regional unemployment rates, country unemployment rates, GDP), to define the reference group and to measure the impact of unemployment on affected individuals (e.g., health, subjective well‐being, consultation, medication) are not always the same.

In this chapter, we hypothesize a process of normalization: the massive statistical increase in unemployment may have led those affected by it to view it more as common place; unemployment might thus be seen as a normal or even inevitable phase of life in a person’s career path, and as the result of external circumstances rather than personal ones [16, 17]. In order to test this hypothesis, we designed items to question unemployed people’s perception of and relationship to unemployment more directly. As in previous studies, and for the sake of facilitating comparisons, we consider the socioeconomic variables “age,” “gender,” “marital status,” “circumstances of job loss,” “unemployment duration,” “previous unemployment,” and “unemployment in social environment” but also the economic context in the countries of residence. The data and results can thus be compared between two countries whose unemployment rates—along with their histories of employment and unemployment—are clearly distinguishable: France and Luxembourg.

In France, the first unemployment concern date back to 1967. At that time, the country counted 250,000 job seekers and the National Employment Agency was created (ANPE, which became Pôle Emploi or “the National Employment Center” in 2008). The threshold of one million unemployed in the labor force was recorded in 1976, 3 years after the first oil shock of 1973. Former industrial areas (e.g., the textile industry in Northern France) were also struggling to deal with modernization. Since then, the unemployment rate has risen almost continually. Two million unemployed persons were counted in 1981, and by the beginning of the 1990s, the unemployment rate reached 10% of the labor force. A peak of 3,000,000 unemployed was recorded in 1997 and again in 2012. As of the end of 2016, the unemployment rate—as defined by the International Labor Organization—has somewhat diminished (9.6%). In France, an involuntarily unemployed working‐age person who worked for at least 4 months over the previous 28 months (or the last 36 months for those over the age of 50), can be compensated by the National Employment Center at rates of 57 (minimum)–75% (maximum) of the reference salary, for up to 14 months.

In Luxembourg, the situation is very different, as well as the history. Within the EU‐28, Luxembourg has the highest gross domestic product (GDP) per capita in Purchasing power standard (PPS) terms and thus ranks first among European countries [18]. In this country bordering France, Belgium, and Germany, employment—largely dominated by services—nearly tripled between 1960 and 2010, with the share of frontier workers rising continuously until 2010 [19]. The recent crisis has also had repercussions on this country’s economy. Thus, employment stagnated and unemployment increased from 4% in 2008 to 5.9% in 2009 (OECD, 2010) [36]. However, this rate remains among the more moderate in Europe and is currently at its lowest level, 6.2%, since 2012. In Luxembourg, an unemployed person who worked at least 6 months over the past 12 months is entitled to compensation amounting to 80% of the reference salary; the duration of benefits is proportional to the length of the previous employment, with a maximum of 12 months. In order, to better understand individual perception and experience of unemployment in different economic contexts, we thus collected data with unemployed people in France and Luxembourg.

2. Method

About 600 unemployed people, with 50% being residents of Luxembourg and 50% of France, responded to a paper‐and‐pencil questionnaire consisting of socioeconomic questions, 7 items that aimed to determine individual perception of unemployment on a 4‐point Likert scale ranging from 1 (totally disagree) to 4 (totally agree) and the 12‐item General Health Questionnaire (GHQ‐12; [20]), a widely used scale for evaluating the lack of well‐being. All were French‐speaking. Participants were 38.4 years old on average (SD = 11.4). Around 45.7% were married or in a relationship and 40% unmarried or single. They were unemployed for varying lengths of time: less than 6 months (44.1%), between 6 months and 1 year (21.0%), between 1 and 3 years (24.5%), and more than 3 years (10.4%). From which, 63% received unemployment benefits and 37.2% were unemployed following a dismissal. This sample from two nationalities does not differ significantly in terms of these individual variables, apart from gender (44.8% women in Luxembourg versus 59.0% in France, χ2 = 12.07, df = 1, p ≤.001), first‐time unemployment (51.8% in Luxembourg and 39.3% in France, χ2 = 9.44, df = 1, p ≤.01), and unemployment in social environment (63.0% in Luxembourg versus 74.2% in France, χ2 = 8.80, df =1, p ≤.001). These three variables that differentiate the total sample of the study can be considered as national economic indicators, as they are related either to unemployment’s recurrence (first‐time unemployment versus previous unemployment) or proportionality (degree of unemployment in social environment) as well as markers of national social policies (lower number of women on the labor market in Luxembourg due to stronger social benefits).

3. Results

The questionnaire items that were selected to better understand the individual representation and experience of the job‐seekers’ professional situations have been analyzed psychometrically, first individually, then collectively, in order to identify the latent dimensions of this assessment. Information about the distributions of each of the items is repeated in Table 1, along with differences that depend on the country (Luxembourg versus France) and the gender of the respondents.

ItemsMSDF (1598)F (1597)
1. I’m unemployed because of the current economic downturn2.411.1616.65**.26(NS)
2. Unemployment is due to the country's economic situation2.531.09131.33***8.61*
3. I’m unemployed because companies are not recruiting2.431.08511.15***.18 (NS)
4. Unemployment is a result of the crisis2.651.01318.07***.3.47(NS)
5. Unemployment is an inevitable stage in life2.231.056.12(NS).28(NS)
6. It is now normal to be or to have been unemployed2.521.045.2.09 (NS).07 (NS)
7. Unemployment is now a normal stage in a person’s career path2.42.999.08 (NS).1.26 (NS)

Table 1.

Distribution of questionnaire items (N = 600) and differences in the experience between the unemployed in Luxembourg (MLux) and France (MFr) and between men (MM) and women (MF).

*p ≤ .05;

**p≤ .01;

***p≤ .001; NS, non-significant; N/A, non-applicable.

In order to check the latent structure of this questionnaire related to explanations given by the unemployed about their current professional situation, we have applied principal component analysis and exploratory factor analyses (SPSS‐23; varimax and oblimins rotation; eigenvalues > 1 rule). The fit of the correlation matrix was tested with factor analyses and revealed no anomalies (Kaiser-Meyer-Olkin measure of sampling adequacy =.71; Bartlett’s sphericity test: χ2 = 882.54; df = 21; p ≤.001) and, therefore, are compatible with the use of these multifactorial analysis methods. The study’s results are very convergent and point to the existence of two latent factors in the questionnaire, which explain 59.15% of the total variance in the responses to the items. The results of these analyses are summarized in Table 2.

1. I’m unemployed because of the current economic downturn.738−.021
2. Unemployment is due to the country’s economic situation.821.044
3. I'm unemployed because companies are not recruiting.678.103
4. Unemployment is a result of the crisis.738.122
5. Unemployment is an inevitable stage in life.076.733
6. It is now normal to be or to have been unemployed.083.813
7. Unemployment is now a normal stage in a person’s career path.035.813

Table 2.

Loadings of the two PCA factors and Cronbach’s alpha for each dimension (Bold: loadings ≥ .40).

To test our hypotheses relating to potential differences in the individual experience of unemployment by respondents according to socioeconomic variables, a series of variance analyses was conducted. For each of them, the two dimensions obtained by factorial analysis were analyzed by taking the following as independent variables: country, gender, age, marital status, unemployment benefits, circumstances of job loss (e.g., dismissal or the end of a fixed‐term contract), unemployment duration (less than 6 months; between 6 months and 1 year; 1 year or more; more than 3 years) previous unemployment, and unemployment in the social environment (whether those in the respondent’s immediate family or social group have also experienced unemployment). All the results are presented in Table 3.

CountryF(1, 598) = 30.08 ; p ≤ .001F(1, 598) = 1.60 ; p ≤ .206
GenderF(1, 598) = 3.78 ; p ≤ .052F(1, 598) = 19 ; p ≤ .661
Marital statusF(3, 595) = 78 ; p ≤ .507F(3, 595) = 4.54 ; p ≤ .01
Unemployment benefitsF(1, 595) = 01 ; p ≤ .949F(1, 595) = 64 ; p ≤ .423
Circumstances job lossF(1, 598) = 1.24 ; p ≤ .266F(1, 598) = 13.26 ; p ≤ .001
Unemployment durationF(3, 595) = 3.70 ; p ≤ .05F(3, 595) = 1.47 ; p ≤ .221
Previous unemploymentF(1, 597) = 9.64 ; p ≤ .01F(1, 597) = 5.82 ; p ≤.05
Unemployment in social environmentF(1, 598) = 3.51; p ≤ .061F(1, 598)=6.65 ; p ≤ .01
Ager = .137, p ≤ .001r = −.130, p ≤.001

Table 3.

Analyses of variance of the two factors resulting from EFA according to socioeconomic variables and correlations.

In order to highlight differences in individual perception of unemployment, Graph 1 represent significant differences in averages for the two dimensions identified by factorial analysis.


Graph 1.

F1 differencies for socioeconomic variables. F2 differencies for socioeconomic variables.

To check the effect of all socioeconomic variables used in the study on the dimensions of individual experience of unemployment, a confirmatory path analysis was conducted using the software Mplus 7.3 [21]. Model fit indicators meet criteria in the field [22, 23] indicating that the data fit the model proposed for analysis (χ2 = 110.97; df = 49; RMSEA =.046; CFI =.967; TLI =.958). Figure 1 presents the results of this confirmatory multivariate analysis.


Figure 1.

Structural equation model of the two factors in the individual experience of unemployment.

Unemployed people’s mental health and subjective well‐being are among the criteria traditionally used to understand people’s relationship to unemployment and to classify them in terms of a more or less negative individual experience of unemployment. For the sake of comparison, the correlations between this psychological dimension (i.e., SWB) and the individual experience of unemployment are also considered and analyzed in this study. The correlations among the scores on the General Health Questionnaire‐12 (GHQ‐12) and the two dimensions of unemployment perception as obtained by factor analysis demonstrate a weak relationship between two of these psychological constructs and none between the other two, as shown in Table 4.

Perceived health (GHQ‐12)r = −.179, p ≤ .001r = .064, p = 118

Table 4.

Correlations between perceived health and two factors resulting from EFA.

This result was confirmed by a confirmatory path analysis for which only 5% of the variance of the GHQ‐12 scores are explained by the two factors in experience of unemployment (χ2 = 133.40; df = 60; RMSEA =.046; CFI =.962; TLI =.952). These results are reproduced in Figure 2. This model has been tested taking into account potential direct influences of socioeconomic variables on the GHQ‐12 score. This model, reproduced in Figure 3, presents indicators of good fit (χ2 = 126.37; df = 59; RMSEA =.044; CFI =.965; TLI =.955) and highlights only the influence of the country of residence on perceived health. Thus, the unemployed in France have a perception of greater individual well‐being than those in Luxembourg.


Figure 2.

First structural paths model of the experience of unemployment and well‐being.


Figure 3.

Second structural paths model of the experience of unemployment and well‐being.

4. Discussion

The first analysis of questionnaire items relating to individual perception of the unemployment transition reveal a general pattern among respondents, a majority of whom agree with the selected statements (with an average response above 2) and consider unemployment to be the result of a specific economic situation as well as a “normal” stage in a person’s professional career. They also demonstrate that the country’s economic conditions are more strongly seen as being at the root of unemployment in France than in Luxembourg, although there are no significant differences between the two countries in terms of the new role of unemployment in an individual’s professional career. Regarding the gender of respondents, there are almost no differences, as it is only for the item “Unemployment is due to the country’s economic situation” that women express stronger agreement than men. We can further observe that, while they consider unemployment to be an effect of the economic situation, women do not differ from men in evaluating their own career transition and do not attribute it more than men to the economic situation (cf. item: “I’m unemployed because of the current economic downturn”).

The structural analysis of the questionnaire items points to two latent factors covering four and three items, respectively. While the loadings structure of the scale is very simple [24], it is clear that the number of items for each factor is still very limited and can explain internal consistencies which are relatively weak but still in line with expectations for this type of item [25]. In view of the items’ loadings on each factor, the first can be interpreted as a dimension of Justification for current unemployment situation (F1) and the second as a dimension of Perceived normality of unemployment (F2).

These dimensions of the experience of unemployment are sensitive in different ways to the socioeconomic variables used in this study. Thus, it appears that external justification of the unemployment situation is greater in France compared to Luxembourg, increases linearly and significantly as a function of the duration of unemployment and as a function of an individual’s age, and is less marked in first‐time unemployment. Conversely, we observe that Perceived normality of unemployment is greater for single people compared to other categories (with the largest gap between widowed and single people), as well as those who have lost their jobs for reasons other than dismissal, those with unemployment in their social environment or previous unemployment experience, and for the youngest unemployed people. Only the variables “age” and “previous unemployment” are linked with both factors. We note positive correlations between age and external justification and negative correlations between age and perceived normality; and an increase in scores for both of these factors for those with previous unemployment experience. Perhaps not surprisingly, we observe that social and economic justification for unemployment is greater in the country with the more intense history associated with this career transition (i.e., France versus Luxembourg) as well as for those who have been unemployed for longer, who have previously experienced unemployment, or who are older. Meanwhile, unemployment is more trivialized among youth, single people, those with previous unemployment experience, those without unemployment in their social environment, and those who have not been displaced.

These results are confirmed by the structural paths analysis. However, if all of the socioeconomic variables in the model are considered simultaneously, only the countries and duration of unemployment have a significant influence on Justification for current unemployment situation. The unemployed people in France justify their current unemployment situation in terms of economic reasons than those in Luxembourg. The same holds for people who have been unemployed for longer. In the same way, Perceived normality of unemployment is greater among youth, those with previous unemployment experience and with unemployment in their social environment, and those who have not been displaced. Of course, these results are congruent between the two types of statistical analysis carried out (bivariate versus multivariate).

However, behind these results, the most interesting point in our view is to observe that, contrary to what is often emphasized in the literature [1113, 26, 27], the perception of unemployment by people currently experiencing it is only very partially explained by socioeconomic variables. In fact, in the model used here, justification for unemployment and its perceived normalization are only predicted for less than 7% each by the combined economic and professional situations in the study countries from which our indicators are drawn. It is therefore appropriate to question the actual role that these economic variables play in the experience of unemployment. Indeed, without denying the importance of these variables, we must conclude that other, more individuals, dimensions necessarily have a significant effect on the perception of unemployment. We could consider, for example, the causal attributions for unemployment [28, 29], work centrality for individuals [30], and the different coping strategies [31, 32] that individuals develop in a stressful professional situation such as unemployment. A number of studies have already pointed out the influence of these psychological dimensions on unemployment and demonstrated their impact, not only on the experience of unemployment, but also on the length of such transitions and the risk of long‐term unemployment (e.g., [3335]). It will certainly be important for future research to take into account both of these potential sources of variation in the experience of unemployment, i.e., psychological and socioeconomic, as well as their interactions, in order to better understand both the mechanisms at work during this type of transitional phase, and their impact on vocational reorientation. These conclusions are confirmed by analyses carried out subsequently to this study. The individual experience of unemployment has a slight effect on perceived health and perceived well‐being. That is, people who justify their situation the most using social and economic explanations tend to score lower on the GHQ‐12, indicating a greater sense of well‐being. An opposite and less marked link emerges between perceived health and the current perception that unemployment is normal. These results are convergent with other results already demonstrated in the literature. The normalization of unemployment should therefore not be seen as an adaptive process with an effect of lowering individual pressures in dealing with this situation. But the most interesting point to emerge from these analyses is based on the fact that the socioeconomic variables do not have a direct effect on the perceived well‐being of the unemployed (with the exception of the country of residence). These are mediated by the two dimensions of justification and trivialization of the individual’s unemployment situation and have an indirect impact on unemployed people’s health. This point therefore supports our previous conclusions that argued for the interest of not artificially subdividing variables, whether psychological or social and economic, in order to attempt to model the individual experience of unemployment and understand how it could serve as indicator of well‐being and, potentially, of vocational reorientation strategies to be implemented. It could therefore be useful and positive to develop studies that combine psychometric and econometric models to account for all the variables of epistemological and heuristic interest in order to articulate and explain the experience of unemployment.

Like any study, this research has a number of limitations. In our view, there are two points to remember in order to better analyze the results we have highlighted. The first concerns the number of countries compared in this study. Indeed, although Luxembourg and France are quite distinct in terms of economic and social features, there are certain social protection factors that are relatively similar across Europe. Extending this type of research to include other economic systems as well as other types of unemployment benefits could provide important perspective. One clear direction would be North American or Asian countries. The research would benefit from bringing other countries into these international comparisons. The second point relates to perceived health or well‐being, which is often considered the most important dependent variable of such studies. Without challenging this state of affairs, we would like to recognize that the well‐being of job seekers does not follow from their employment situation alone, and many other factors are linked to their experience. We could include, for example, issues related to family, leisure activities, or social life, which are not considered in these studies. In our view, there are two possibilities for addressing this limitation. The first would be to introduce other noneconomic and nonpsychological dimensions into the explanatory models in order to increase the sources of potential variation and thus, the explanatory power of the models developed. The second would be to consider health in a more specific way, rather than measuring general well‐being. In this regard, we suggest that replications of this study would benefit from considering these new variables.

5. Conclusion

Based on the first results of previous research, the present chapter questions the likely normalization of unemployment. We first hypothesized that “unemployment normalization” depends on economic (unemployment history and the current unemployment rate of a country) and individual (age, gender, marital status, circumstances of job loss, unemployment duration, and previous unemployment) variables; second, we examined the correlation between unemployment normalization and perceived health. The unemployment normalization is operationalized here by two dimensions “Justification for current unemployment situation” and “Perceived normality of unemployment.” The results showed correlations between sociodemographic and economic variables and help to enhance our understanding of this new alternative relationship to unemployment. Nevertheless, it seems future research will need to consider psychological variables for a complete view of the unemployment normalization.


This research was supported by the National Research Fund, Luxembourg, under Grant number C13/SC/5885577 (UnemployNorm).


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