Economists have known for years that long-term unemployment can greatly reduce a person's chances of finding another job. But researchers at the University of California, Los Angeles, have found that the stigma of being unemployed begins the minute the person walks out the door.
"We're finding that people actually judge the unemployed as not good people compared to the employed," Geoffrey Ho, a doctoral candidate in human resources who led three studies of the psychological burden borne by the unemployed, said in a telephone interview.
It's not new that potential employers tend to shy away from hiring someone who has been unemployed for a long time. The longer a person is out of work, the less likely it is that he or she will ever find another job, according to many studies. That's partly because of "skill decay," especially in high-tech fields where the game can change on a daily basis, but it's also because of nagging doubts over the abilities, competence and confidence of a person who is unable to find work for months or even years.
What's new, however, is the finding that a worker's stock begins to decline immediately. It's not a huge drop, at least initially, but it's significant, according to the UCLA studies.
The first two studies drew from UCLA databases, and most of the participants were students, who presumably have little or no experience in hiring people. But the third was from a national database maintained by Amazon and widely used by researchers. It is believed to be representative of the nation as a whole.
Participants in all three studies were given resumes from job seekers which told much about their lives, such as education, work record, experiences, and other factors. Some of the participants were told the applicant was still employed. The rest were told that he or she had been unemployed for just a few days. The only difference was whether the person was still employed.
The participants were asked to rate the applicant on competence, including whether the person seemed confident, capable, efficient, intelligent, and skillful. They were also asked if the person is friendly, good natured, sincere, trustworthy, warm and well intentioned.
"We were surprised to find that, all things being equal, unemployed applicants were viewed as less competent, warm and hirable than employed individuals," Ho said. "We were also surprised to see how little the terms of departure mattered. Job candidates who said they voluntarily left a position faced the same stigma as job candidates who said they had been laid off or terminated."
Only when the job loss was in no way attributable to the individual, such as bankruptcy by the employer, did the disadvantage of being unemployed disappear, the researchers said.
Co-investigator Margaret Shih, associate professor human resources at the university, added, "Individuals tend to make negative associations with those who were unemployed, which often leads to unfair discrimination."
Through statistical analysis, the researchers determined that about five percent of the participants' judgment on whether the applicant would be a good hire was based on whether he or she was currently employed.