Consequences of Long-Term Unemployment

Consequences of Long-Term Unemployment

In addition to loss of income, long-term unemployment can lead to permanently low wages, poor physical and mental health, and high mortality rates, a literature review from the finds. The report, (20 pages, PDF), also found that the reduced incomes and increased family stress caused by a parent's job loss can negatively affect children's emotional well-being and educational progress and reduce their future earnings. Moreover, a lack of jobs in communities where unemployed workers live contributes to longer durations of joblessness — in part because their social networks are largely populated by other jobless workers — and, eventually, neighborhood concentrations of poverty. The report's authors also point out that while longer periods of unemployment are associated with lower reemployment wages and lifetime earnings, it remains unclear whether this is due primarily to selection, declining reservation wages, human capital depreciation, or some form of employer discrimination.