How strong is my safety net? Perceived unemployment insurance generosity and implications for job search, mental health, and reemployment

While social science has substantially documented the individual experience of unemployment, less is known about the role of contextual variables. One contextual factor that is important for unemployed job seekers is the unemployment insurance (UI) that they receive. This study examines the relationships between job seeker perceptions of UI generosity and mental health during unemployment, reemployment speed, and reemployment quality. Drawing upon psychological construal theory, we conceptualize UI generosity as creating psychological distance from the reemployment goal, generating consequences for the job search, mental health, and reemployment. We tested our hypotheses with a four-wave survey design of job seekers looking for work in 3 different countries (United States, Germany, and the Netherlands). Perceived UI generosity was associated with slower reemployment speed, via reduced time pressure, job search priority, and job search metacognition. Perceived UI generosity was related to higher mental health, via reduced time pressure and financial strain. Finally, perceived UI generosity was related to increased reemployment quality, both directly as well as indirectly through lower time pressure and financial strain, and subsequent higher mental health. Our findings provide previously unavailable empirical insight into the mechanisms explaining the positive and negative outcomes of UI generosity.