From Marianthal to Latent Growth Mixture Modeling: A Return to the Exploration of Individual Differences in Response to Unemployment Isaac R. Galatzer-Levy and George A. Bonanno Columbia University Anthony D. Mancini Pace University Job-loss is a rapidly growing concern as we witness the greatest and most rapid economic downturn in a century. The negative psychological effect of unemployment has increasingly garnered attention. Previous literature has offered a formidable prog- nosis, stating that in response to job-loss, people typically follow a pattern of rapid decline in life satisfaction and never return to preunemployment levels. In this paper, we attempt to search for individual differences in response to job-loss using Latent Growth Mixture Modeling (LGMM) framework. By building homogeneous trajectories within a prospective design from 3 years before to 4 years after job-loss, we find that the majority of individuals (82%) demonstrate no long-term effects on life satisfaction in response to unemployment. We also examine the roll of larger market forces on levels of life satisfaction during and around the event of job-loss. Using a correlation model, demonstrated that life satisfaction is positively influenced by the regional unemployment rate. Clark (2003) argues that people report higher well-being when they lose their job if those in proximity to them are also becoming unemployed. Using the national and local unemployment rate in a regression model nested in the Latent Growth Model, we found that a social comparison effect is present immediately before unemployment but not once individuals became unemployed. This implies that people reference national and local employment trends in an attempt to anticipate their own course of employment rather than referencing those trends after job-loss. Keywords: Latent Growth Mixture Modeling, unemployment, life satisfaction Losing a job can be a profoundly distress- ing event. As the United States and Western Europe experience unemployment rates ap- proaching double digits for the first time in over 25 years, concern about unemployment has become ubiquitous. Unemployment has been shown to have a cost to the individual beyond the purely monetary concern of a loss in income. Nonpecuniary costs arise from un- employment as individuals potentially lose access to social relationships, identity in so- ciety, self-esteem, and self-conception—all of which can be garnered from employment. Ul- timately, even after reemployment, productiv- ity, self-conception, cognitive efficiency, and attitudes toward work can continue to be af- fected (Darity & Goldsmith, 1996; Winkel- mann & Winkelmann, 1998). In this paper, we investigate how unemployment, as well as broader economic trends during and before the event of unemployment, affects nonpecu- niary costs. A large body of literature argues that job-loss has a profound and long lasting detrimental psy- chological effect far beyond the generative effects associated with loss of income. The “psychologi- cal harm” of unemployment has been a long- standing area of interest and empirical study. Us- ing a sociological framework, Johoda, Lazarszfel, and Zeisel (1933) studied the effects of unemploy- ment in Marianthal, a small Viennese factory town, 3 years after the closing of the local factory. Isaac R. Galatzer-Levy and George A. Bonanno, Depart- ment of Counseling and Clinical Psychology, Columbia University; Anthony D. Mancini, Department of Psychol- ogy, Pace University. Correspondence concerning this article should be ad- dressed to Isaac R. Galatzer-Levy, Columbia University, Department of Counseling and Clinical Psychology, 525 West 120th St., Box 102, New York, NY 10027. E-mail: irg2101@columbia.edu Journal of Neuroscience, Psychology, and Economics © 2010 American Psychological Association 2010, Vol. 3, No. 2, 116 –125 1937-321X/10/$12.00 DOI: 10.1037/a0020077 116