The Long Reach of Long-Term Unemployment
Long-term unemployment is, of course, a big concern. The longer someone is out of work, the lower the chance that person regains employment. And when that person does regain work, the greater the odds that he or she will take a (perhaps large) pay cut. This can limit the economic growth potential of the country, as it may mean permanently reduced incomes both for individuals and for the economy as a whole. I do not even need to mention how great the personal hardship is for these individuals.
There is research that quantifies the relationship between re-employment probabilities, as well as income changes when re-employed. First is a report from the Cleveland Fed that examines displaced workers (e.g., workers displaced due to business or economic conditions affecting an entire firm or department, rather than individual terminations). These data are from a biannual survey of individual workers. In the 2008 survey, there were 3.6 million displaced workers. By 2010, the number jumped to 6.9 million. The 2012 survey showed about 6.1 million workers were displaced from January 2009 through December 2011....520 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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