Guest Post by Carol Brown
While the unemployment situation seems to be getting better nationwide, there are still millions who are out of work or underemployed in the wake of one of the worst recessions our nation has seen in decades. Unsurprisingly, a lot of research has been done on unemployment and its effects on the unemployed, but the findings aren’t always what you’d expect. While some of those out of work will find jobs and reenter the workforce, research suggests that the effects of unemployment can extend for decades, harming future earning power, success, and even the livelihoods of the children of those who are unemployed. Here we highlight some of the most telling, shocking, and interesting studies done on the unemployed, which demonstrate that finding work isn’t easy nor is shaking the effect unemployment, even temporary, can have on an individual’s career, personal life, and financial security for the rest of their lives.
Those receiving unemployment benefits work harder to find a job.
While some have a great deal of sympathy for the unemployed, just as many are quick to point out how those collecting unemployment are simply leeching off of all of those who still have jobs while enjoying an undeserved break from work. Cruel, yes, but research suggests that it’s also very much untrue. A study done by Congress’ Joint Economic Committee found that beneficiaries of unemployment benefits actually spend more time actively searching for work than those who are ineligible for the benefits. The results make sense, if you think about it. UI benefits require that recipients look for work and also provide some support that allows the flexibility required to really put effort into finding a job.
Unemployment increases the risk of premature death.
One of the most distressing studies on unemployment has to do with its effect on mortality. Researchers at McGill and Stony Brook Universities found that the risk of premature death is increased by more than 63% by unemployment. While both sexes run a greater risk of premature death, the results were amplified for men in the study, who seemed to find unemployment even more stressful than their female counterparts. Spanning 40 years, the study found that pre-existing health conditions played no role and that death risk was increased most for those under 50 years of age, both troubling factors as unemployment has been skyrocketing in recent years for young adults.
Looking for a job on the Internet reduces unemployment time.
The Internet is a big distraction for those looking for work, right? Wrong. A study released in 2011 actually found that using the Internet to look for work actually reduced the time spent unemployed by an incredible 25%. Researchers believe that the enormous breadth of resources offered by websites today, especially those that allow job seekers to leverage their personal contacts, as well as the sheer number of people using the web to look for jobs help account for this high rate of success.
Three-quarters of the unemployed skip health care.
Sadly, one of the behaviors that contributes to the increased risk of premature mortality of those who are unemployed has to do with health care, or more precisely, lack of health care. A study by the Commonwealth Fund found that 72% of people who lost their health insurance when they lost their jobs skipped needed health care, preventative care, or filling prescriptions due to cost concerns. This means that not only are unemployed individuals involved in the high-stress situation of looking for work, but that any health issues that present themselves as a result, even potentially serious issues, aren’t being addressed in 72% of cases. Additionally, emergency situations and unavoidable health care situations have caused just as many, 72%, to be saddled with serious medical debt while unemployed.
Parental job loss can have adverse effects on dependent children’s behavior.
One of the saddest findings of modern research on the unemployed exposes a connection between job loss and achievement in dependent children, a distressing sign that could mean that the effects of the recession last long after the economy has rebounded. Researchers at the University of Chicago found that parental job loss had adverse effects on children’s behavior, academic achievement, and even employment outcomes, especially in families that were already economically disadvantaged. The hardships caused by unemployment were found to reduce the quality of the home environment by such a degree that long-term issues with children were considerably more likely to develop, including acting out in class, lowered cognitive development, and even increasing the likelihood of children repeating a grade.
When unemployment goes up, so does alcohol consumption.
While unemployment may put strict limits on the amount of disposable income individuals have to spend, studies have found that that doesn’t stop the unemployed from indulging in unhealthy behaviors, especially drinking. Health economist Michael French and a team from the University of Miami discovered that as the economy deteriorates, heavy drinking and alcohol dependence increase significantly, as well as the number of DUIs. Even those studied who were still employed demonstrated more binge drinking and drunken driving behaviors during the years of the recession, perhaps due to job loss fears.
There are serious stigmas attached to unemployment that make finding new work difficult .
One of the most unfair aspects of unemployment demonstrated in recent studies is the stigma it attaches to those who are unemployed, making it difficult or sometimes impossible to find another job. While this is not necessarily shocking, it is deeply saddening just how fast this happens after a job loss. A group of researchers at UCLA found that hiring prejudices against the unemployed start the minute they walk out of their former jobs, with employers judging the unemployed as not as good or less worthy than those who are employed, even if they’d lost their job only days before. The negative associations with unemployment persisted regardless of the reason why people were unemployed, and only when a job was lost through bankruptcy of a company did potential employers’ views about the individual soften. Researchers believe that about 5% of the participants’ judgment on whether the applicant would be a good hire were based on whether he or she was currently employed, a small but significant percentage.
Youth unemployment can harm young adults for several years into the future.
Youth unemployment is at record-high levels, with more than half of young college grads unable to find work. The effects of this could be far-reaching, research suggests, and may have a financial and social ripple effect that lasts for a generation. Studies have found that unemployment at a young age sets the stage for employment and financial problems for a lifetime. Unemployment delays gains in experience, which can lead to a loss in wages, which can sometimes persist for decades. Additionally, those who experience one bout of unemployment are much more likely to face future unemployment and will face longer spells of unemployment than those who’ve never been unemployed. It’s not fair, but it could be a fairly common reality for today’s college grads.
Unemployment can reduce income for a lifetime.
An analysis of data from the 1982 recession found that job loss due to mass layoffs caused a serious drop in earning power, often for an entire lifetime. Immediate losses in earning power due to unemployment were found to drop wages by an average of 30% and even after 15 to 20 years the effects of this job loss still hovered at 20%. This drains workers’ resources for retirement, savings, and spending alike and demonstrates the h3 and long lasting impact that unemployment can have.
Unemployment causes a loss of self-respect and friendship.
The unemployed may not just lose their jobs, a Pew Research Center study suggests, but will suffer serious social and emotional losses as well. In addition and in response to job loss, the unemployed also struggle with the loss of feelings of self-respect and friendships, both of which can increase feelings of isolation and depression and work against the confidence needed to find new work. Forty-six percent of those unemployed for six months or longer reported strained family relationships and 43% reported loss of contact with close friends. Long-term unemployment takes a toll on self-esteem as well, with 38% reporting a loss of self-respect and another 24% seeking help for depression or other emotional issues. Even sadder? Many of the unemployed report that they feel joblessness, even for as little as three months, will harm their ability to achieve their long-term career goals.
Time out of work causes skill depreciation.
Most of us could guess that time spent out of the workforce would cause certain skills to depreciate, that’s part of what makes it so hard for those who’ve been unemployed for a long period of time to find work. But what you might not have guessed is that research has helped to illuminate how even skills like reading are subject to this sort of depreciation. A Swedish study conducted during the mid to late ’90s found that the participants’ ability to read and make practical use of printed information decreased proportionally to the length of time they were unemployed. A full year of unemployment was associated with a 5% drop in skills, even those as basic as reading.
Job prospects vary by major.
While it’s no surprise that certain majors aren’t exactly priming grads for the job market, just how much major affects the ability to find work is surprising. A Georgetown University report found that the highest rates of unemployment were found in those who have an architecture degree, with almost 14% out of work. Architecture was followed by the arts (11%) and the humanities (9.4%) in the number of young, unemployed grads. The best majors? Health and education, both of which share a low unemployment rate: just 5.4%. Yet regardless of major, the unemployment rate for college grads is still considerably lower than that of non-college graduates. Compare these stats: unemployment averages 8.9% for college grads, 22.9% for high school graduates, and a staggering 31.5% for high school dropouts. Even in a saturated, unstable job market, a college degree is a definite asset.
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