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What Is Long-Term Unemployment?

If you’ve been out of work six months or more, it’s long term

To be counted as “long-term unemployed” by the Bureau of Labor Statistics (BLS), you must be unemployed for 27 weeks or longer and have actively sought employment during the past four weeks.

To get a better understanding of long-term unemployment, it helps to know what the statistics say and what the causes and effects are.

By the Numbers
  • In November, the number of long-term unemployed people was 1.2 million, similar to the month prior.
  • The number of individuals who have been unemployed for six months or more is 54,000 higher than it was before the pandemic.
  • Long-term unemployed accounted for 20.6% of the total number of unemployed people in November.2

What Long-Term Unemployment Means for You

The number of long-term unemployed persons as a percentage of all unemployed persons is an important tool used to measure the health of the U.S. economy. Events like the COVID-19 pandemic can temporarily displace millions of workers, but it spells even more trouble for the economy if these people remain unemployed. Not only will these people no longer be eligible for unemployment insurance (UI) payments, studies have shown it becomes harder to find work the longer you’ve been unemployed.

Main Causes of Long-Term Unemployment

The two causes of long-term unemployment are cyclical unemployment and structural unemployment. Cyclical unemployment itself is often caused by a recession. Structural unemployment occurs when workers’ skills no longer meet the needs of the job market.

A third type of unemployment, “frictional unemployment,” refers to temporary unemployment you face during a job search. These are typically short-term situations and aren’t included in long-term unemployment discussions.

Note : Long-term cyclical and structural unemployment feed off each other.

A recession causes a massive rise in cyclical unemployment. Those who can’t find jobs become long-term unemployed. If out of work long enough, their skills become outdated. In time, this contributes to structural unemployment. They have less money to spend, resulting in reduced consumer demand. It further slows economic growth, leading to more cyclical unemployment.

Main Effects of Long-Term Unemployment

Being unemployed for six months to a year will almost always strain personal finances. A Pew Research study about the Great Recession found that recession affects the long-term unemployed worse than others in the areas of personal relationships, career plans, and self-confidence.

In particular, the long-term unemployed reported the following:

  • More than half, or 56%, saw their income decline, compared with 42% of the short-term unemployed (less than three months) and 26% of those who kept their jobs.
  • Almost half experienced strained family relations. That’s compared with 39% of those who weren’t unemployed as long. And 43% lost contact with close friends.
  • Nearly 40% lost self-respect. Almost one-quarter sought professional help for depression compared to 10% of the short-term unemployed.
  • For 43%, the recession had a “big impact” on their ability to achieve career goals. That’s true for only 28% of their short-term peers.
  • More than 70% say they either changed careers or seriously considered a career change. An additional 29% became underemployed with lower pay and benefits than their previous job.

How Long-Term Unemployment Benefits Extensions Help

Federal unemployment benefits extensions assisted the long-term unemployed in their job search efforts after the Great Recession. Congress approved the extensions in the 2009 American Recovery and Reinvestment Act. They were reauthorized every year until 2013.

The benefits provided the long-term unemployed with up to 99 weeks of unemployment checks. It helped support them until they could find decent jobs. Without the extensions, they would have had to take any job they could, leading to underemployment. This might preclude them from ever catching up as their skills became more outdated.

Unemployment benefits typically only help those who were laid off, though. Some employers fire workers for cause or ask workers to resign in return for a severance package so that they don’t have to pay benefits. Workers who quit, part-time workers, the self-employed, and students or mothers just entering the workforce aren’t eligible for benefits.

How To Calculate the Long-Term Unemployment Rate

The long-term unemployment rate is easy to calculate because the BLS breaks down the statistics each month in its Employment Situation Summary. The number of people who have been unemployed for 27 weeks or more is in Table A-12.

The BLS also calculates the percentage they make up of the total unemployed. This table gives you the data for the past five months and year-over-year, seasonally adjusted. It also allows you to compare the last two months and year-over-year, not seasonally adjusted.

Frequently Asked Questions (FAQs)

How long does unemployment insurance last?

Eligible individuals in the U.S. can receive unemployment insurance (UI) payments for up to 26 weeks. The Department of Labor lists contact information for all 50 states’ unemployment insurance offices on its website.

What is considered long-term unemployment?

The Bureau of Labor Statistics (BLS) defines “long-term unemployed person” as an individual who has been unemployed for 27 weeks or longer and has actively sought work during the previous four weeks.

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