Latest Research News on Unemployment : Feb 2022

Employment and Unemployment

This book was first published in 1982. Unemployment is perhaps one of the most serious social problems. In economic terms the cost of unemployment, both to the individual and to the collective, is extremely high. But unemployment has other effects too. In this book Marie Jahoda looks beyond the obvious economic consequences, to explore the psychological meaning of employment and unemployment. The book is an accessible and nontechnical account of the contribution which social psychology can make to understanding unemployment and clearly reveals the limitations of an exclusive concentration on its economic aspects. Professor Jahoda shows that the psychological impact is hugely destructive, throwing doubt on the popular diagnosis that the work ethic is disappearing. She also analyses the experience of unemployment in the context of the experience of employment and argues that one of the socially destructive consequences of large-scale unemployment is that it detracts from the need to humanise employment.[1]

The unemployment crisis

An updated version of the overview section of Unemployment: Macroeconomic Performance and the Labour Market (1991), which provides the main arguments and findings of the larger work. Develops a framework that explains both the stock of unemployed people and the flows into and out of unemployment as well as the evolution of wage and price inflation; allows for union bargaining, efficiency wages, unemployment insurance, labor mobility, and many other influences.[2]

The Individual Experience of Unemployment

This review describes advances over the past decade in what is known about the individual experience of unemployment, predictors of reemployment, and interventions to speed employment. Research on the impact of unemployment has increased in sophistication, strengthening the causal conclusion that unemployment leads to declines in psychological and physical health and an increased incidence of suicide. This work has elucidated the risk factors and mechanisms associated with experiencing poor psychological health during unemployment; less so for physical health and suicide. Psychologists have begun to contribute to the study of factors associated with reemployment speed and quality. The past decade has especially illuminated the role of social networks and job search intensity in facilitating reemployment. Evidence suggests some individuals, especially members of minority groups, may face discrimination during their job search. Although more work in this arena is needed, several intervention-based programs have been shown to help individuals get back to work sooner.[3]

The European Unemployment Dilemma

Post‐World War II European welfare states experienced several decades of relatively low unemployment, followed by a plague of persistently high unemployment since the 1980s. We impute the higher unemployment to welfare states’ diminished ability to cope with more turbulent economic times, such as the ongoing restructuring from manufacturing to the service industry, adoption of new information technologies, and a rapidly changing international economy. We use a general equilibrium search model in which workers accumulate skills on the job and lose skills during unemployment.[4]

The Structure of Unemployment

We test for a unit root in postwar unemployment rates for sixteen OECD countries. When a one-time structural break is incorporated, the unit root hypothesis can be rejected for most of the countries and the measured persistence of unemployment falls dramatically. We then test for multiple structural changes and find evidence of one or two breaks for those countries for which the unit root hypothesis could be rejected. Almost all of the breaks are positive, reflecting the sustained rise in European unemployment. The major exception is the United States, where long-term unemployment rose in the 1970s and fell in the 1980s.[5]


[1] Jahoda, M., 1982. Employment and unemployment. Cambridge Books.

[2] Layard, R., Nickell, S. and Jackman, R., 1994. The unemployment crisis.

[3] Wanberg, C.R., 2012. The individual experience of unemployment. Annual review of psychology, 63, pp.369-396.

[4] Ljungqvist, L. and Sargent, T.J., 1998. The European unemployment dilemma. Journal of political Economy, 106(3), pp.514-550.

[5] Papell, D.H., Murray, C.J. and Ghiblawi, H., 2000. The structure of unemployment. Review of Economics and Statistics, 82(2), pp.309-315.

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