Study Shows Psychological Impact of Unemployment

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The randomly selected sample of 1,200 Americans, of which almost 900 were unemployed when the study was conducted in the beginning of August, included people of all ages, races, professions, and income levels. Most of the surveyed workers had lost a permanent position, with only 27% having had a temporary position. The sample was pulled from a 40,000-person database of Knowledge Networks, a survey research company, whose profiles mirrored the Labor Dept.'s definition of the unemployed as those in the workforce seeking employment. The study also includes people without landline telephones and Internet access.

The survey found that 60% of the respondents received no advance warning of their layoff, and 84% received no severance package or other compensation. Just under half, 43%, of those unemployed reported having received unemployment benefits in the past year, which broadly reflects the national average, while 61% described themselves as "very concerned" their benefits would expire before they found a job.

Dipping into Savings

It was the first stint of unemployment for a slim majority (51%) of those surveyed. About half (51%) said the government should be mainly responsible for helping to provide for workers who have been laid off, while one-third thought workers themselves should handle that responsibility. Nearly all of those still unemployed reported that they had cut their spending, while more than half had resorted to dipping into savings or retirement accounts, or borrowing from friends or family. One-quarter said they had missed a mortgage or rent payment because of their unemployment.

Despite the desperation, many of the jobless said they remain committed to attending job fairs, scouring job boards, or visiting career centers for help. "The expression of resolution and perseverance on the part of these folks gives the sense that these folks have not given up," Van Horn said. "But they're living with anxiety," not knowing when they may land a job.

Van Horn says the survey's results signify the current downturn's impact will be felt long after the economy rebounds and more Americans find work. "Just as the Great Depression had a big effect, this is a major life-changing experience for people," he says. "It's not like getting over a cold—it's like recovering from serious illness." Long-term unemployment may lead to higher divorce rates, Van Horn speculates, and could also persuade Americans to take fewer financial risks.

The American notion of success is often based solely upon the capability of individuals, says Ellie Wegener, director and founder of the Employment Support Center, a Washington-based nonprofit that leads support groups for the unemployed. "It's the backfire of individualism, which this country is great at," she says. "Here your success or your failure depends on you, so when people lose their job, they think it's because they are a failure. They need to regain their self-esteem, or they'll never get a job."

Deprez is a reporter for BusinessWeek.