Long-term hardship

from John Schmitt

In a new CEPR report (pdf), Janelle Jones and I argue for rethinking our understanding of “long-term unemployment.”

From the executive summary:

First, we encourage shifting from a narrow focus on long-term unemployment toward a broader concept of “long-term hardship” in the labor market. Many workers or potential workers who do not fit the official definition of long-term unemployment – including “discouraged” and “marginally attached” workers and those involuntarily working part-time jobs – face long-term hardship in the labor market, but are not captured in the standard measure of long-term unemployment.

Second, we suggest complementing the standard measure of long-term unemployment, which reports the share of the unemployed who have been out of work for 6 months or more, with an alternative measure, which reports the share of the total labor force that has been unemployed for 6 months or more. This alternative measure avoids some counter-intuitive properties of the standard statistic and is better for making comparisons across demographic groups.

The broader measure of long-term hardship that we propose, which adds “discouraged workers,” the “marginally attached,” and half of the workers who are “part-time for economic reasons” to the standard measure of long-term unemployment, is more than twice as large (7.0 percent of the working-age population) as the official US long-term unemployment count (3.1 percent).

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