Using data for 28 European countries for the period 2008 to 2012, we
examine whether employed individuals are affected by the economic crisis.
We provide robust evidence that unfavourable macroeconomic conditions
are negatively associated with the life satisfaction of employees. In addition,
we find that higher levels of regional unemployment and inflation are
predominantly associated with lower levels of life satisfaction for employees
who are in a bad financial situation or who expect that their future
financial situation will be worse. By contrast, employed people who do
well financially and who have good prospects are not affected by the crisis.