Long-term unemployment has remained a persistent problem post-Great Recession – a somewhat new issue for the U.S., as compared to Europe. Despite declining over the last 5 years, the share of the unemployed who have been out of work for more than 6 months still exceeds its previous peak reached in 1981-82, and is well above its average in the last recovery. Yet, measures of short-term unemployment are close to their average rates in the last recovery. As a result, overall unemployment remains elevated because of the large number of people who have been unemployed long term.
There could be a lot of new unemployment coming from new technology. 6 million professional driving jobs in the USA are at risk with the development of self driving cars. A lot of these people could end up as long term unemployed. There should be more aggressive job creation policies and retraining programs in parallel with introduction of the new job displacement technologies.
According to a study by Columbia’s Till von Wachter and the Chicago Federal Reserve’s Daniel Sullivan, long-term unemployment can knock up to 18 months off of life expectancy:
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There could be a lot of new unemployment coming from new technology. 6 million professional driving jobs in the USA are at risk with the development of self driving cars. A lot of these people could end up as long term unemployed. There should be more aggressive job creation policies and retraining programs in parallel with introduction of the new job displacement technologies.
According to a study by Columbia’s Till von Wachter and the Chicago Federal Reserve’s Daniel Sullivan, long-term unemployment can knock up to 18 months off of life expectancy:
We use administrative data on the quarterly employment and earnings of Pennsylvanian workers in the 1970s and 1980s matched to Social Security Administration death records covering 1980–2006 to estimate the effects of job displacement on mortality. We find that for high-seniority male workers, mortality rates in the year after displacement are 50%–100% higher than would otherwise have been expected. The effect on mortality hazards declines sharply over time, but even twenty years after displacement, we estimate a 10%–15% increase in annual death hazards. If such increases were sustained indefinitely, they would imply a loss in life expectancy of 1.0–1.5 years for a worker displaced at age forty. We show that these results are not due to selective displacement of less healthy workers or to unstable industries or firms offering less healthy work environments. We also show that workers with larger losses in earnings tend to suffer greater increases in mortality. This correlation remains when we examine predicted earnings declines based on losses in industry, firm, or firm-size wage premiums.
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