Unemployment's Psychological Scars

Unemployment's Psychological Scars

Posted on

Tue, 04/05/2011 - 1:52am

By Lauren Appelbaum and Chris Tilly

After nearly two years of recession, the United States economy
entered a period of slow recovery in the third quarter of 2009. However,
despite seven quarters of GDP growth, jobs have just barely started to
recover.

The unemployment rate in the U.S. fell to 8.9% in February, the
first time in nearly two years that it has dropped below 9%. Nearly 14
million people still remain unemployed, and millions more are working
part-time but want full-time hours or are out of work but no longer
counted in the official unemployment statistics. Of the officially
unemployed, about 6 million or nearly 44% have been out of work for six
months or more — among the highest levels of long-term unemployment ever
recorded, exceeded only at the peak of this recession. And almost
one-third have been unemployed for a year or more; the average time to
find a job is now about nine months.
 
We frequently hear about the terrible economic effects of the
longest and deepest economic downturn of our lifetimes. Yet, these
economic impacts are just part of the story. The scars from
unemployment, underemployment and insecure employment, as well as how we
respond to others who are facing unemployment — in particular,
long-term unemployment — will reverberate throughout society long after
the job market recovers.
 
Many studies over the years have found that unemployment has a
negative effect on a large number of outcomes ranging from the physical
to the social to the psychological. Decades of research have
demonstrated a relationship between unemployment and poor overall
health: increases in deaths due to cardiovascular problems, cirrhosis,
and suicide; decreases in well-being; increases in depression, anxiety
and mental hospital admissions; increases in alcohol abuse; and
increases in violence and arrests.
 
Unemployment creates insecurity and disrupts plans, both current
and future. Unemployment may also lead to limited finances and
constraints on personal choices. The time frame for reaching goals and
milestones — buying a home, continuing with education, moving out on
your own or retiring may be altered by poor economic conditions. There
is evidence that disruptive economic events during the life course can
have consequences reaching well into the future.
 
A relatively unexamined outcome of the psychological trauma caused
by living in a world of economic uncertainty is the impact that
unemployment and long-term unemployment have on the decisions we make
about our life course trajectories — decisions about school, retirement
and family. For instance, polls indicate a recent increase in college
applications, but also suggest that people working their way through
college have had to leave school.
 
The growth in labor force participation since December 2007 among
men 62 or older indicates that people may be delaying retirement and
working longer. The number of people over 55 with jobs increased 7.6
percent during the three years from the start of the recession in
December 2007 to December 2010. And there was an associated rise in the
unemployment rate for this group, indicating that fewer people are
retiring.
 
While marriage can help to soften the blow of unemployment,
unemployment can lead to marital dissatisfaction. The strain of
unemployment may result in decisions to dissolve marriages or postpone
getting married. Polls indicate an increase in the dissatisfaction among
married couples and a decrease in the number of marriages in areas
particularly hard hit by the recession.
 
Furthermore, there has been a decline in the U.S. birth rate since
the start of the recession. The number of births in the U.S. fell by
2.7% in 2009, at the height of job loss in the U.S. This was despite an
increase in the population of child-bearing age.
 
The decisions we make about our life course affect not only
ourselves, but our children, our families and our communities as well.
They may have serious implications for the future health of the U.S.
economy – even decades beyond the end of this recession. Attention to
the psychological impacts of the jobs crisis as well as its economic
impacts is essential and will allow for a response to the fallout from
the economic crisis that better meets the needs of the unemployed and
their communities than a narrow concern with financial reform or fiscal
prudence.

Both Lauren D. Appelbaum, research director, and Chris Tilly,
director, are with UCLA's Institute for Research on Labor and
Employment. They are the organizers of the conference, "Reconnecting to Work:
Consequences of Long-Term Unemployment and Prospects for Job Creation,"
held on April 1-2 at UCLA.

By Lauren Appelbaum and Chris Tilly

After nearly two years of recession, the United States economy
entered a period of slow recovery in the third quarter of 2009. However,
despite seven quarters of GDP growth, jobs have just barely started to
recover.