Return of long-term unemployment in US

More than 10 percent of Americans say they have recently given serious consideration to suicide. Among younger adults, that figure rises to over one in four. Thirteen percent of people have reported starting or increasing drug or alcohol use to cope with pandemic-related stress. Nearly one in three say they have symptoms of anxiety or depression. These alarming statistics, based on a survey from late June, come from a report released this month by the Centers for Disease Control (CDC) and Prevention, and show that the nation’s mental health has significantly deteriorated during the pandemic.
Unfortunately, there’s no end in sight to the economic uncertainty, closed schools, cramped quarters and social unrest, let alone the fear and risk of illness and death. And if those who are unemployed now continue to go without a job for longer periods, more people will suffer from depression, anxiety and other psychological problems. The CDC report, which is based on a web survey and may not be fully representative of the US population, did not find that employment status played a large role in people’s assessment of their mental health. And there is plenty to be stressed about regardless.
But in the discussion of the economic emergency facing the US, we need to pay more attention to how long-term unemployment affects people’s health, including mental health. In a 2012 paper, economists Timothy J Classen and Richard A Dunn studied the effect of job loss and the duration of unemployment on suicide risk in the US Using mass layoffs — when more than 50 workers from the same employer apply for unemployment benefits in a 30-day period — they found that the probability of suicide does not increase in the period immediately after workers lose their jobs.
Instead, the primary factor pushing up suicide rates is longer spells of unemployment. Specifically, they document one additional suicide death for roughly every 20,000 workers who have been unemployed between
15 and 26 weeks. As the current economic weakness continues, longer periods of unemployment are becoming more common. In March, when the pandemic recession began, 808,000 workers had been unemployed between 15 and 26 weeks. In May, this measure, at 1.1 million, had not risen significantly because the downturn was only two months old. But in July the number of workers who had been unemployed between 15 and 26 weeks shot up to 6.5 million. The evidence suggests that a large increase in the number of workers suffering from poor mental health will soon follow.
Unemployed workers’ physical health is likely to deteriorate as well. Economists Daniel Sullivan and Till von Wachter estimate that male workers in the 1980s who had long tenures with their employers saw their mortality risk increase by 50% to 100% in the years immediately after job losses that were part of mass layoffs or similar events. Over the long run, the annual probability of dying for these workers increased by 10% to 15% per year for at least the following 20 years.

—Bloomberg