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Study findings sobering for long-term unemployed

In a sobering new study, three Princeton economists found that only 11 percent of the long-term unemployed in any given month found full-time work a year later.

The paper, presented Thursday at a Brookings Institution Panel on Economic Activity, offered a comprehensive look at the profile of the long-term unemployed. The lead economist behind the study is Alan B. Krueger, the former chairman of President Barack Obama's Council of Economic Advisors.

The economists tested the hypothesis of whether a low supply of jobs or discrimination by employers contributed to long-term unemployment.

The answer? Probably both.

"The demand-side and supply-side effects of long-term unemployment can be viewed as complementary and reinforcing of each other as opposed to competing explanations," the economists wrote. "Statistical discrimination against the long-term unemployed could lead to discouragement, and skill erosion that accompanies long-term unemployment could induce employers to discriminate against the long-term unemployed."

The paper concludes that "a concerted effort will be needed to raise the employment prospects of the long-term unemployed." Otherwise, these job seekers will continue to drop out of the workforce and hold the economy back, the economists said.

According to the U.S. Bureau of Labor Statistics, the number of people unemployed 27 weeks or longer rose 203,000 in February, reaching 3.8 million. Even in states with booming economies, such as North Dakota, the long-term unemployed find landing a full-time job elusive.

The paper looked at unemployment rates in 14 states, including Minnesota, Hawaii and Kansas, where the average unemployment rate was 4.4 percent. Long-term unemployment rose even in these states, suggesting that even if the national economy improves, these job seekers will be left out in the cold.

New in the paper was a more detailed breakdown of who makes up this group. The economists found that in 2012:

• More than 30 percent of those out of work for extended periods are 50 or older, compared with 20 percent of the short-term unemployed.

• 55 percent of the long-term unemployed are men.

• 44 percent of the long-term unemployed have never been married and nearly 20 percent are either widowed, separated or divorced.

• Blacks represent 22 percent of the long-term unemployed, a rate higher than their share of the population.

Study findings sobering for long-term unemployed 03/21/14 [Last modified: Friday, March 21, 2014 8:14pm]
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