More on employment. This is the summary from a new CBO report on long-term unemployment:
Summary ...The flexibility of the labor market is generally considered a source of strength for the U.S. economy. Some people, however, remain jobless for many months. Those long-term unemployed workers account for a large portion of the total weeks of unemployment.
This paper examines the extent to which unemployment is concentrated among workers who are unemployed for more than six months. It also examines the characteristics of those long-term unemployed workers as well as their sources of income and subsequent activities. ...
Key findings include these:
· Although fewer than one-in-ten of the unemployment spells of adults that began in the 2001–2003 period lasted more than half a year, those long-term spells accounted for 37 percent of all weeks of work lost by adults due to unemployment during that period (see Summary Figure 1). The share jumps to 44 percent when shorter spells of unemployment experienced by those same people are included.
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· Spells of unemployment often ended with the job seekers leaving the labor force rather than taking a job. About 70 percent of the unemployment spells begun by adults during the 2001–2003 period ended with the individuals taking a job; 25 percent ended with them stopping their search; and the remaining spells were still in progress when the survey ended.
· Workers who never finished high school were not only more likely than other labor force participants to become unemployed, they also remained unemployed for a longer time. During the 2001–2003 period, although only one-in-ten adults in the labor force had not graduated from high school, one-in-six of the adults who experienced any unemployment and one-in-five of the adults who experienced a long-term unemployment spell did not have a high school diploma.
· A majority of the long-term unemployed received unemployment insurance benefits for at least part of the period in which they were unemployed, offsetting a portion of their lost earnings. Also, although a majority of the long-term unemployed had health insurance coverage while unemployed, the percentage lacking insurance during their spell was higher than it had been before those workers became unemployed.
Another section of the report shows the evolution of the duration of unemployment spells:
The description of the figure in the CBO report notes that:
The rise in long-term unemployment as a percentage of total unemployment reflects a decline in the percentage of the labor force that became unemployed as well as an increase in unemployment duration. In an average month in 2006, 1.7 percent of the labor force had been unemployed for less than five weeks... That short-term unemployment rate is the lowest ... for half a century (see the lower panel of Figure 1). Those statistics indicate that, apart from variations stemming from the ups and downs of the business cycle, people are less likely to become unemployed than in the past, but those who do become unemployed are more likely to remain unemployed for more than half a year.