Unemployment alters the set-point for life satisfaction. According to set-point theories of subjective well-being, people react to events but return to initial levels of happiness over time. This study tests this idea by examining reaction and adaptation to unemployment in a 15-year longitudinal study. Individuals initially reacted strongly to unemployment but did not fully return to their former levels of life satisfaction, even after re-employment. The findings suggest that unemployment can alter a person's long-term set-point for life satisfaction. Individual differences in reaction and adaptation were significant, with some people adapting more than others. Although life satisfaction was generally stable over time, unemployment influenced long-term levels, indicating that life circumstances can affect well-being. The study used a multi-level modeling approach to analyze within-person changes in life satisfaction before, during, and after unemployment. Results showed that people did not return to baseline levels of life satisfaction after unemployment, suggesting that unemployment created a new baseline level of satisfaction. The study also found that initial life satisfaction correlated with adaptation to unemployment, with more satisfied individuals less likely to adapt. Overall, the findings support the idea that unemployment can change a person's long-term set-point for life satisfaction.Unemployment alters the set-point for life satisfaction. According to set-point theories of subjective well-being, people react to events but return to initial levels of happiness over time. This study tests this idea by examining reaction and adaptation to unemployment in a 15-year longitudinal study. Individuals initially reacted strongly to unemployment but did not fully return to their former levels of life satisfaction, even after re-employment. The findings suggest that unemployment can alter a person's long-term set-point for life satisfaction. Individual differences in reaction and adaptation were significant, with some people adapting more than others. Although life satisfaction was generally stable over time, unemployment influenced long-term levels, indicating that life circumstances can affect well-being. The study used a multi-level modeling approach to analyze within-person changes in life satisfaction before, during, and after unemployment. Results showed that people did not return to baseline levels of life satisfaction after unemployment, suggesting that unemployment created a new baseline level of satisfaction. The study also found that initial life satisfaction correlated with adaptation to unemployment, with more satisfied individuals less likely to adapt. Overall, the findings support the idea that unemployment can change a person's long-term set-point for life satisfaction.