The study examines the impact of unemployment on life satisfaction over a 15-year longitudinal period, testing the set-point theory of subjective well-being. According to this theory, individuals initially react strongly to events but eventually return to their baseline levels of happiness and satisfaction. The research finds that while individuals do react strongly to unemployment, they do not fully return to their pre-unemployment levels of life satisfaction, even after becoming re-employed. This suggests that unemployment can alter a person's long-term set-point for life satisfaction. Within-person analyses reveal significant individual differences in reaction and adaptation to unemployment, indicating that while there is substantial stability in life satisfaction over time, life circumstances can influence long-term subjective well-being. The findings have implications for understanding the hedonic treadmill and the role of personal circumstances in shaping long-term happiness.The study examines the impact of unemployment on life satisfaction over a 15-year longitudinal period, testing the set-point theory of subjective well-being. According to this theory, individuals initially react strongly to events but eventually return to their baseline levels of happiness and satisfaction. The research finds that while individuals do react strongly to unemployment, they do not fully return to their pre-unemployment levels of life satisfaction, even after becoming re-employed. This suggests that unemployment can alter a person's long-term set-point for life satisfaction. Within-person analyses reveal significant individual differences in reaction and adaptation to unemployment, indicating that while there is substantial stability in life satisfaction over time, life circumstances can influence long-term subjective well-being. The findings have implications for understanding the hedonic treadmill and the role of personal circumstances in shaping long-term happiness.