The great recession and subjective well-being: How did the life satisfaction of people living in the United Kingdom change following the financial crisis?

Abstract

The financial crisis of 2007/08 precipitated a severe global economic downturn, typically referred to as the Great Recession. However, in the United Kingdom this period has been marked by limited change in national indicators of subjective well-being. We assessed the life satisfaction change in response to the Great Recession in a sample of British adults (N = 8,661). We first show that on average the life satisfaction change across the sample was limited. However, average effects may mask substantial amounts of heterogeneity in the data. We therefore explore beyond this average effect to determine whether there were disproportionate changes (losses and gains) in life satisfaction in key sub-groups of the population. We found that individuals experiencing unemployment, who lost income, were sick or disabled, experienced the greatest well-being reductions. Contrastingly the life satisfaction of many individuals did not greatly change following the Great Recession and for some it may have even improved. Our work highlights vulnerable groups that may need additional help during recession periods and also cautions against the over reliance on average measures of well-being.