Unemployment alters the set point for life satisfaction.

According to set-point theories of subjective well-being, people react to events but then return to baseline levels of happiness and satisfaction over time. We tested this idea by examining reaction and adaptation to unemployment in a 15-year longitudinal study of more than 24,000 individuals living in Germany. In accordance with set-point theories, individuals reacted strongly to unemployment and then shifted back toward their baseline levels of life satisfaction. However, on average, individuals did not completely return to their former levels of satisfaction, even after they became reemployed. Furthermore, contrary to expectations from adaptation theories, people who had experienced unemployment in the past did not react any less negatively to a new bout of unemployment than did people who had not been previously unemployed. These results suggest that although life satisfaction is moderately stable over time, life events can have a strong influence on long-term levels of subjective well-being.