Why Long-Term Unemployment Isn’t As Bad As You Think

Why Long-Term Unemployment Isn’t As Bad As You Think

2013-09-30 09:27:35

Here’s some good news for folks who’ve long been out of work: that big gap on your resume may not be hurting your job search as much as you think. A new study by three economists finds that while callbacks do decrease during early months of unemployment, by eight months out of the workforce, the effect levels off and more months of unemployment don’t particularly matter.

Those findings come from what academics call an audit study. Researchers sent fictitious resumes to real job openings, and then tracked how callbacks differed according to how many months of unemployment appeared on each resume. The researchers, Kory Kroft of the University of Toronto, Fabian Lange of Yale University, and Matthew Notowidigdo of the University of Chicago, did this on a pretty grand scale, submitting more than 12,000 resumes to more than 3,000 online job postings across the nation’s 100 largest metropolitan areas.

The headline result: employers called and offered an interview to seven percent of “applicants” who had been unemployed for just one month, and that callback rate steadily dropped as unemployment lengthened, with resumes showing eight months of unemployment receiving callbacks for interviews only four percent of the time. Yet after eight months, the callback rate didn’t drop too much more, even as the researchers extended the length of unemployment all the way out to 36 months.

Furthermore, in parts of the country with high unemployment, callback rates didn’t vary nearly as much according to length of unemployment. The researchers surmise that employers understand that when the economy leaves a huge number of people out of work, a person being unemployed for a while isn’t nearly as telling a fact as it might be when jobs are more easily had.

The researchers also found—to their surprise—that employers were more likely to offer an interview to a person who had been unemployed for a few months than to a person currently employed. After talking to some hiring professionals, the researchers figured that this might have something to do with the perception that the currently employed aren’t serious job seekers, or that negotiating salary or start date is tougher when a person still has another job.

So what’s the take-away for unemployed job seekers?

Well, first, it’s probably a good idea to do more than submit your resume to online job ads. In the study, resumes solicited a callback for an interview only 4.7 percent of the time overall. And while 12.6 percent received any sort of callback (including those asking for more information), neither hit rate is much to write home about. Additionally, the researchers threw out results from 83 job ads after deeming them “questionable” because of evidence that the employer was engaging in dishonest or deceptive behavior.

Second, if you have been out of work for a while, it may be a good idea to indicate on your resume why you wound up jobless or how you’ve been spending your time. In order to construct their fictitious resumes, the researchers—and a legion of research assistants, to be sure—combed through about 1,200 real resumes in order to see how the unemployed typically present themselves. They found that 95 percent offered no explanation for the gap. Including a bit about how you’ve been working as a volunteer or pursuing additional training could make you stand out.

Finally, if you are approaching some big milestone of unemployment—like the one-year mark—try not to worry too much about the signal unemployment is sending, especially if you are in a high-employment pocket of the country. The impact on your job prospects might not be as bad as you think.

That said, the results of a single academic study should never be taken as gospel. In order to make the fictitious resumes comparable outside of unemployment length, the researchers created just one sort of worker profile—a young person without extensive job experience—and only applied for positions in sales, customer service, administrative support, and clerical work. Do the same trends hold across other industries and for more experienced workers? Or when people apply for jobs through channels other than online job postings? Unfortunately, we can’t tell from this study. Optimism is in order, but a cautious one.

Categories: Career Advice

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