Less Than A Quarter Of The Long-Term Unemployed Got Steady Jobs 5 Years Later

Three-year-old Jaynell Bender waits as her unemployed parents use computers search for jobs CREDIT: AP
Three-year-old Jaynell Bender waits as her unemployed parents use computers search for jobs CREDIT: AP

Just 22 percent of those who ended up unemployed for six months or longer during the 2008 recession found steady, full-time work by the beginning of 2013, according to a new analysis from Princeton professor Alan Krueger as reported by the Wall Street Journal.

Looking at a Census Bureau survey of households between 2008 and 2013, he found that the rest of the long-term unemployed weren’t faring very well. The largest share, 35 percent, had dropped out of the labor force altogether, either giving up on finding a job, going back to school, retiring, or choosing some option other than job hunting. While 28 percent had found some employment, it wasn’t steady or full time. Another 14 percent were still unsuccessfully job hunting five years after they lost their jobs.

The study is a follow up to a recent report Krueger co-authored at the Brookings Institution using a different set of data from the Current Population Survey. But the results were strikingly similar. Among those who ended up long-term unemployed between 2008 and 2012, 34 percent had dropped out of the labor force while just 36 were unemployed. But the situation for that latter group still looked bleak: of those who found a job, just 11 percent had steady, full-time work.

That paper also found that the chances of an unemployed person getting a new job have increased for most groups but barely budged for the long-term unemployed. Those out of work for six months or more get work at less than half the rate of those with short unemployment spells.

These dismal numbers don’t stem from the long-term unemployed being uniquely unhireable, however. They look very similar to other unemployed workers, and while they tend to be a bit older and more racially diverse, they are also a bit more educated. Their problems mostly stem from bad luck. The single biggest predictor of ending up out of work for a year or more is the state of the economy when someone loses her job. Similarly, losing a job when overall unemployment is at peak levels means high odds of ending up long-term unemployed.

Yet that’s not how they are viewed by prospective employers. Being out of work longer than nine months is the equivalent of losing four years of experience from a resume. The long-term unemployed get fewer calls back than the employed who don’t have the right experience.

This group of unemployed people is also going without any benefits, which means they are likely turning to friends, family, savings, or even public assistance, because Congress let them lapse at the end of last year. And while some had hoped that would increase their chances of getting jobs, it doesn’t seem to be doing anything to help them find work.