The Discouraging Findings Obama’s Former Economic Adviser Has About Longterm Unemployment

In a fairly discouraging outlook from a former Obama economic adviser, the longterm unemployed may not have much brighter futures even when the economy does pick up.


An analysis found that from 2008 through 2012, only about 10 percent of those without a job for 27 weeks or longer returned to steady, full-time employment within a year of when government agencies checked back with them. Steady employment is defined as working the same job for at least four months.

Alan Krueger, former chairman of the White House Council of Economic Advisors, co-authored the Brookings Institute study on the longterm unemployed along with two other Princeton University colleagues, Judd Cramer and David Cho.

The study found that if someone is without a job for 15 months, they are twice as likely to drop out of the labor force entirely. Already, 10.8 million dropped out of the labor force since early 2009, which skews the unemployment rate – currently 6.7 percent – that measures the jobless who are looking for work.

“The portrait of the long-term unemployed in the U.S. that emerges here suggests that, to a considerable extent, they are an unlucky subset of the unemployed,” the Brookings study said.

Moreover, the Brookings study found that reemployment for long-term unemployed did not improve substantially in states with stronger job markets. That could project dim prospects for when the economy improves.

“Our preliminary analysis suggests that the longterm unemployment rate has remained elevated even in low-unemployment rate states (defined as the 13 states with the lowest unemployment rates in the U.S. as of October 2013),” the study said. “In addition, we do not find evidence that the longterm unemployed are faring better in terms of transitioning to employment in the low-unemployment states than in the high-unemployment states.”

It added, “These findings suggest that the longterm unemployed will continue to encounter difficulty finding employment even if the unemployment rate continues to fall, although a stronger economy would undoubtedly raise the prospects of the long-term unemployed.”

Previous studies have found that being unemployed for a long period of time carries a stigma that could repel potential employers, according to the Washington Post. The newspaper cited a study where researchers sent out phony resumes with all things being equal, and found employers were far less likely to respond to long term unemployed than those that were jobless for only a short time.