Future Outlook and Financial Strain: Testing the Personal Agency and Latent Deprivation Models of Unemployment and Well-Being

Abstract

Two hundred and thirty-nine unemployed adults were administered scales tapping well-being, financial strain, future orientation, the latent benefits of employment, neuroticism, length of unemployment and whether the person was the principal income earner in the household. First, the study tested the relative contributions of the Latent Deprivation Model and the Agency Restriction Model in predicting psychological well-being of unemployed people. Second, the study tested whether financial strain interacted with future orientation to predict well-being, or whether financial strain was mediated by future orientation. The study found support for the Agency Restriction Model over the Latent Deprivation Model, but concluded that examining internal personal agency processes in the context of the individual's temperament and situation is needed to explain the decline in well-being associated with unemployment. No interaction effects were identified and future orientation did not mediate the influence of financial strain. The contextual variable of the unemployed person being a principal income earner influenced well-being directly, the latent benefit of social support influenced well-being indirectly via future orientation, length of unemployment influenced well-being indirectly through negative future orientation, whereas the personality variable of neuroticism had a direct effect on well-being and an indirect effect via future orientation. Practical implications are also indicated.