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.
"It's not a huge number," Ho conceded, "but there's a lot of information coming at the participant, even videos showing how the applicant talks, experience, and other things. There's a lot of other things that make up people's judgment of competence."
Given all those facts, if "someone only looks at the unemployment status that would be incredibly surprising," Ho added. So even five percent, he said, is significant.
So the stigma is real, they add, and if the person remains unemployed for a long period, the stigma probably gets worse ("What's wrong with this person?") and that is only one of many disasters confronted by the long-term unemployed. It can even shorten their lives.
Researchers at McGill University, for example, found that unemployment increased the risk of premature death by 63 percent, based on research covering 20 million persons in 15 countries over the last 40 years. And that wasn't because they could no longer afford adequate health care.
"One surprising finding was that, in spite of expectations that a better health-care system might contribute to lower mortality rates, the correlation between unemployment and a higher risk of death was the same in all the countries covered by the study," the McGill study said.
Similarly, researchers at the University of Michigan found that the loss of a job can lead to a "downward spiral of depression and poor health."
The situation is particularly grim today, even with the economy improving, at least slightly. Many jobs have been lost to other countries, and many applicants lack the skills needed to compete in today's market. A study at Rutgers University concluded that many will never be employed again, causing some to question their own identity because they allowed their careers to define them.
And the latest study from UCLA shows that the downward spiral, and the stigma that goes with it, can come on fast and furiously.