Unemployment has become a very prominent issue worldwide; moreover in the United States the unemployment rates have been persistently high. Since December 2008, the unemployment rate in America has been over 7 percent, and in late 2009 it peaked at 10 percent (Nichols, Mitchell, and Lindner 1). Despite the gradual improvements in the labor market, the supply of workers available in relation to available work, long-term unemployment – the share of the unemployed who have been out of work for more than six months – remains at unprecedented levels. The fraction of unemployed workers who are long-term unemployed has hovered around 40 percent from late 2009 into 2013, although it had never previously risen above 30 percent since the Great Depression (Nichols, Mitchell, and Lindner 1).
With the economy going through a recession and prices rising, being employed and having an income is a significant part of life. But the income is not the only facet to being employed. In many ways, being employed can affect every single aspect of life.
A job can be everything that one relies on to support their whole life. When employment that has such a huge impact on one’s life is suddenly removed, it can cause a huge negative change. “The unemployed can suffer distress when their job activities, which allowed these functions to be fulfilled, are lost” (O’Brien 242). This is why unemployment can have such detrimental effects upon one that is no longer in a job.
“As unemployment has recently become a visible social problem, a number of studies on individual reactions to unemployment have appeared” (O’Brien 215). The individual reactions and effects of unemployment can be seen in many ways, and many repercussions can strand from unemployment, whether negative or positive. These range from determining one’s leisure activities to one’s family and community life (O’Brien 185). But the main and most important way is psychologically. “Unemployment has a deleterious effect on psychological well being” (Kokko and Pulkkinen 206). “Research has consistently shown that unemployed people report diminished levels of psychological well-being in comparison to their employed counterparts” (Kokko and Pulkkinen 205).
A certain cost of unemployment that considerably outweighs other factors is the non-pecuniary cost (Carroll 287). Non-pecuniary is anything that does not consist of money. The main non-pecuniary cost is distress and decreased psychological well being. This is shown in many different forms and can be influenced and modified by many different aspects. There are many factors involved in the severity of these psychological effects of unemployment. All of the factors join together to lead to a bigger object: the psychological well being of the unemployed individual and the psychological effects of unemployment.
Factors Affecting the Psychological Effects
“Many studies have concluded that unemployment is a health hazard – the subtle implication being that it is better to be...