It is widely assumed that the economic and social costs that unemployment gives rise to must
be exacerbated where joblessness is concentrated within families and neighbourhoods. This
hypothesis is tested in this paper. Specifically, data from the first three waves of the HILDA
Survey are used to test whether jobless individuals score worse on two indicators of wellbeing
– a measure of overall life satisfaction and a measure of mental health – when they live
in households with other jobless people. Consistent with a wealth of previous research,
unemployment is found to be associated with lower levels of well-being, but there appears to
be very little additional disadvantage that stems from being both unemployed and living in a
jobless household. Females involved in home production and not actively searching for work
are the only group for whom it can be confidently concluded that the situation of the
household matters.