Impact of Joblessness
The Federal Reserve Bank of New York has released a study that sheds light on the continuing hardship caused by joblessness, even after individuals return to work. Individuals who directly moved from one job to another secured a 6.9 percent increase in hourly wages, while those who experienced joblessness between jobs suffered an 18.5 percent drop in hourly wages. Similarly, average weekly working hours rose by 3.3 percent for those who changed jobs without interruption, while those who were jobless between jobs experienced a 9.7 percent drop in weekly worktime. Moreover, 37.3 percent of those who’d been jobless had no benefits on their current job, compared to only 13.2 percent of those who changed jobs without interruption.
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An important advantage of the study is that it queried individuals about their wages, benefits and worktime at specific times connected with the start and conclusion of specific jobs that the individuals held in the past. The principal U.S. Census Bureau and U.S. Bureau of Labor Statistics (BLS) surveys do not question individuals in this manner, but instead focus on an individual’s current job.
That individuals who experience joblessness suffer labor market hardship is well known, but it is useful to be able to quantify the degree of hardship, which underlines the importance of employment, education and training programs to ameliorate the impact of joblessness. The study did not distinguish between those who quit versus those who involuntarily lost their previous job, but BLS data show that the vast majority (about 90 percent in recent years) conclude their jobs involuntarily. The data could also be used to roughly calculate the costs of joblessness even after individuals return to work.
Modified On : September 08, 2015
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