Using data from the Gallup U.S. Poll, this paper estimates the effects of aggregate unemployment on the subjective well-being of U.S. residents. First, this paper finds that a rise in the state-level unemployment rate negatively affects subjective well-being, even after controlling for state and time fixed effects and personal characteristics, such as employment status. This suggests that a rise in state-level unemployment has negative spillover effects on all residents of that state and not just those who lose their job. Second, this paper finds that the presence of strong welfare, measured by the base generosity of state unemployment insurance benefits, does not impact how individuals react to changes in the unemployment rate. In other words, statutory generosity does not appear to protect the subjective well-being of individuals during economic downturns. Third, this paper finds that the perception of strong welfare, proxied by the adoption and implementation of Medicaid expansion, has a statistically significant impact on the way in which individuals react to changes in the unemployment rate. Specifically, individuals living in states that are perceived to have strong welfare experience a smaller loss of positive emotions and a smaller gain of negative emotions during recessions.