Unemployment

The statistics show that the burden of unemployment is distributed unevenly across sections of society. To illustrate this point, Table 2 outlines the unemployment rate for various age groups, education levels, ethnic groups, and family status for the U.S. labor market in June 2001.

Age. The Table 2 data indicate that the unemployment rate varies considerably across age groups. The individual's age is generally used as a measure of the accumulation of knowledge of the labor market (best practice with respect to job search processes, information networks) that occurs through labor market activity. Individuals between the ages of sixteen and nineteen have the highest unemployment rate (15.9 percent for males and 12.7 percent for females). In comparison, individuals who are fifty-five years or over have the lowest unemployment rate, around 3 percent. The relatively high unemployment rate experienced by youth is the basis for arguments that they should be given priority in unemployment reduction policies. To the extent that unemployment today diminishes an individual's future job prospects (Le and Miller 2000), there is an additional reason to be concerned over the labor market difficulties encountered by many youth. In such a situation, failure to address the current unemployment problem may leave a large number of youth exposed to a process of cumulative disadvantage in the labor market over much of their working lives.

Education. The formal skills that may affect unemployment outcomes include schooling, qualifications, and language proficiency. Educational attainment is arguably the most important of these. The data in Table 2 indicate a pronounced, inverse association between unemployment and educational attainment. For example, the unemployment TABLE 2

rate of those who did not complete a high school diploma is three times higher than that of college graduates. There is also a notable difference between the unemployment rate of a non-high school graduate (7 percent) and one who has graduated (4 percent). The pattern in the data suggests that individuals can enhance their employment prospects considerably by completing high school.

Racial groups. Labor market performances also differ across racial groups. To illustrate this, data for the White, Black, and Hispanic racial groups are included in Table 2. The data show that the unemployment of white Americans (about 4 percent) is around one-half that of blacks and Hispanics (unemployment rates of 8 percent and 7 percent, respectively). Black youths (16–19) appear to be particularly disadvantaged, with an unemployment rate of 28 percent. These unemployment rate differentials paint a picture of disadvantage similar to that which emerges from study of other labor market indicators, such as earnings.

Family status. Most studies of unemployment recognize the importance of marital status as a determinant of labor market outcomes. The data in Table 2 indicate that married men and women with spouse present have the lowest rates of unemployment of the family states distinguished in the table. Individuals who have never married have the highest rate of unemployment, around 9 percent. The unemployment rate of women who maintain a family (spouse absent) is twice that of women who are married with their spouse present.

The Table 2 data illustrate that the presence of children increases the unemployment rate among women, but seems to have minimal impact on the employment outcome of men. This differential in impact presumably is associated with women still having primary responsibility for the care of children, with this responsibility limiting the types of work they obtain. Moreover, there appears to be an inverse relationship between the female unemployment rate and the age of the children. For example, the unemployment rate among women with children under six years is 6 percent compared to only 3 percent for women with children between six and seventeen years. Young children are relatively time-intensive for mothers, whereas older children tend to be more market-goods intensive. In addition, older children can provide An unemployed auto worker stands in an unemployment line with her two children. Unemployment has been connected to higher crime rates, increases in the incidences of alcoholism, child abuse, family breakdown, psychiatric hospitalization, and a variety of physical complaints and illnesses. BETTMANN/CORBIS care for younger siblings, enabling their mothers to pursue a greater range of market opportunities.

The characteristics such as a low level of education and membership of ethnic minorities that are associated with disproportionately high unemployment rates are also generally associated with low incomes among the employed and low-status occupations. Job instability will therefore compound the problems of the low-income groups in society. Not only is unemployment spread unevenly across sectors of society, but the burden of joblessness falls most heavily on those groups who do not have adequate resources to cope with the job loss.