Alan Krueger Study Shows Long-Term Jobless Sleep More, Seek Jobs Less

WASHINGTON -- Alan Krueger, the Princeton economist recruited to lead President Obama's economics team just before the president is set to announce a major new jobs initiative, has done some influential research on unemployment.

In one of his most recent studies, a January working paper with Andreas Mueller of Stockholm University, Krueger found that the longer the jobless were out of work, the less time they devoted to searching for a new job.

"Interestingly, the only activity that significantly increases with duration of unemployment is sleep," the paper [PDF] says.

Krueger and Mueller offered three likely explanations for the decline in job-search durations. First, workers could have run through most of the decent jobs to apply for. Second, they could have gotten better at searching and needed less time to scan and respond to ads. And third, they could have gotten discouraged and quit looking.

"Distinguishing among these explanations is very important, as the latter behavior could lead to hysteresis and prolonged joblessness after the job market improves," Krueger and Mueller wrote.

There are currently 6.2 million people -- nearly half the unemployed -- who've been out of work for six months or longer. According to a June report by the Bureau of Labor Statistics, the Great Recession has actually doubled the amount of time layoff victims remain in the workforce before they either find jobs or give up looking. By the end of 2010, the median successful job search took 10 weeks, up from five weeks in 2007. For people who eventually gave up and left the workforce, the median search in 2010 lasted 20 weeks. Before the recession, unsuccessful job searches usually ended after 8.5 weeks.

After Labor Day, President Obama is set to announce a jobs package that could include programs targeting the long-term jobless. The administration is reportedly considering a scheme adopted by the Georgia Department of Labor that allows businesses to train unemployment insurance recipients without having to pay them -- though there is no real data to vouch for the program, and labor advocates say it's exploitative.

Krueger is intimately familiar with the labor market. His 2011 study with Mueller surveyed 6,025 jobless workers weekly from fall 2009 to spring 2010: Just 1,224 reported receiving a job offer, and a third of the offers were for part-time work. While time spent looking for work changed with duration of unemployment, the decreased work search didn't mean workers were any less likely to receive job offers.

"Surprisingly, receipt of a job offer is unrelated to job search time in our sample," the report's authors wrote.

The study also examined workers' "reservation wage" -- how low they'd be willing to go in terms of pay. The reservation wage didn't change much over the course of a layoff, with a notable exception for workers older than 50 with $10,000 in savings, whose reservation wage dropped 10 percent after six months of joblessness.

"The apparent willingness of older workers to lower their reservation wage the longer they are unemployed is consistent with the view that job search is an investment: the cost of accepting a lower wage job is less for those who plan to spend less time in the labor market," the paper said. "Older workers gradually realize that they cannot find a job that pays as well as they expected and thus adjust their reservation wage down, whereas younger workers are willing to maintain their reservation wage for longer because it is more costly for them to accept a low paying job."

While conservatives have pointed to past research by Krueger suggesting long-lasting jobless benefits coddle the unemployed and exacerbate jobs crises, the January paper reported mixed results with extended benefits.

"On the one hand, workers do not search more or lower their reservation wage in periods when their [unemployment insurance] benefits have lapsed or been exhausted, suggesting that [Emergency Unemployment Compensation] did not provide a serious disincentive to finding a job," the paper said. On the other hand, it noted that when Congress increased the duration of benefits from 79 to 99 weeks in November 2009, jobless workers' search duration lowered, though the holiday season could have had an effect.

Comments

[lodkia]

11:53 AM on 09/02/2011

As far as I'm concerned some comments on here are simply abusive and degrading! Unemployment extensions ran out a long time ago for a lot of people; so, understand that what someone does in their private time is their business and who helps them out is also none of your concern!

[Tired of the Bullies]

11:48 AM on 09/02/2011

So again the Whitehouse Ignores the simple FACTS....There are 8 million unemployed exhaustees in America RIGHT NOW 6 million who are not counted in BLS U6 rating because they didnt start counting them until the beggining of this year. Many have been looking for work for 182 weeks....SO EXPLAIN to me with no life line why going homeless is a great option for these Americans rather than looking for work. Past 99 weeks thats a long time to be discouraged...The simple fact is there is no JOBS...and the ones that are out there the long term are not being hired for. Its amazing the Right says these people are drug addicts and the left states they have no skills and sleep alot...STOP blaming the unemployed for the mess...Because WE Dont have SHORT TERM memory especially for how we got here and who did nothing but make excuses while we was here.

[NoBlueDogs]

05:44 PM on 09/01/2011

http://www.huffingtonpost.com/2011/08/30/alan-krueger-unemployed-jobless_n_941713.html

We have a basic problem with math comprehens­ion in America. There are 5 people fighting for every 1 existing job opening. So, that means 4 unemployed Americans out of 5 must go without a job. This does not even count the employed people who will also be in search of a second job and who will hence be competing for that opening. It also does not factor in the discrimina­tion issue of employers refusing to hire you if you're unemployed­: which means if you are unemployed­, employers are in fact explicitly excluding you from ever getting another job. What does this mean for those 4 Americans? That searching for a job makes you look productive and makes you look like you are not lazy, but it is actually a total waste of money and time. Those are the facts.

The unemployed are wasting their time and money by job hunting. Irrefutabl­e fact. Again, it looks nice that you're searching for work, and to the plutocrats­, appearance is everything­.

[Rob Huggins]

02:17 PM on 09/01/2011

If the richest of the private sector won't hire or lend to small businesses, why did we give them even more money not to hire with or lend to small businesses. These companies and people were already rich. You think their motivation was that they couldn't find their dollar bills.

The government can balance things out. We've done it before. Hire people directly with tax dollars. Lend to them directly with tax dollars. When those people get back on their feet, some of them will turn around to create the next rich companies that hire the workers of the future.

[Mikdow]

12:44 PM on 09/01/2011

We should be empowering people to make their own work. We can start by funding those folks who had small businesses and lost them to the recession. Small business owners don't get unemployment when their business fails. It is, for them, sink or swim. There is no safety net for the formerly self-employed, yet most of us are creative, resilient and are re-inventing ourselves and our communities.

My business failed in 2008 when the State of California delayed it's payments to me. My creditors would not accommodate my short-term needs not because of default on my part, but because my biggest client was about to default.

To the politicians I say: help me to put my business back together and I will hire people, but I cannot do that if you refuse to pay for what you have purchased from me.

[AmySeow]

09:53 PM on 08/31/2011

After a while, you get tired of never hearing back from jobs, receiving calls from education course scams and being told you're too old. It gets to the point where it's just not worth it.

[fortressfountain]

05:06 PM on 08/31/2011

They waste too much time analyzing. This will get the country no where. A lot of people need jobs because they want money in their pocket.

[fortressfountain]

04:49 PM on 08/31/2011

I think their study is dumb and is not needed. A lot of people do not have the funds to put gasoline in their car or pay transportation costs to go on a wild goose chase.
How about-does an opportunity exist at all? Probablly not.
Gov. incentives for business do not work, people will hire a lot so they can recieve an incentive.
Free labor? How will that solve any problem at all?
How about something to make the process available and easy for the job seeker.
A good start would be to eliminate credit checks, etc.

[matt spedale]

03:55 PM on 08/31/2011

Yes lets get an academic in there. That is brilliant.

[englishman545]

02:57 PM on 08/31/2011

A professor from America working with a Professor from Sweden.

How much American money was the professor from Sweden paid??

My daughter in law is Swedish; I have come to understand the Swedish customs and thinking.
Wouldn't give a dime for their opinion, elitist people who cooperated with Hitler.

The only contribution Sweden has made to the world is IKEA.

[garystartswithg]

06:49 PM on 08/31/2011

You obviously never heard of Volvo, Saab, H&M, etc. etc. etc. Nice talking point fail though.

[englishman545]

03:15 PM on 09/01/2011

Not really, I personally witnessed a Volvo just break in half, most Volvos are made in Italy. Saab is owned by Ford.

H&M???? S&M is popular in Sweden.

I have been there, experienced their attitude first hand, you can keep them.

[boatmonkey55]

01:10 AM on 09/01/2011

Talk about racism...Sweden has low crime, "Swiss bank accounts" for the tax dodgers to hide their $$$, How are their economics these days?? I know (personally) they have excellent advanced medical care, and manufacture of excellent quality products. So...sounds like you may just have a problem with your Swedish daughter in-law

[Rita Foster]

10:28 AM on 09/01/2011

love the comment without the racism part...

[englishman545]

11:03 AM on 09/01/2011

Could very well be, and her family.
I have been there, my Son lived there for a year, many crimes are not reported in the news media. Definite discrimination against non Swedish people
While in Sweden I experienced a definite change in behavior once it was learned that I am American.
They are a cold, heartless people, just like the SS.

[TimRivers]

01:54 PM on 08/31/2011

I can fully understand the sleep increasing. People naturally sleep more when they are depressed and not being able to find anything other than minimum-wage, no-benefits, part-time employment is worse than being unemployed. You won't make enough money to cover your bills, you'll maybe make enough to afford the gas to and from your McJob.

What I'm hoping to hear from the President on his jobs agenda, is a return to a CCC-type, Great Depression-era, infrastucture repair/construction provision that targets primarily the long-term unemployed.

[yakmeat]

02:07 PM on 09/01/2011

"What I'm hoping to hear from the President on his jobs agenda, is a return to a CCC-type, Great Depression­-era, infrastuct­ure repair/con­struction provision that targets primarily the long-term unemployed­."

Don't hold your breath. Though, this is what should have been done in the first place.

[TimRivers]

04:10 PM on 09/01/2011

Not that it matters anyway...whatever the President puts forth will automatically be decried, clamored about, torn apart and otherwise obstructed from coming to fruition by the House GOP. They have already stated as fact that no matter what, if it MIGHT make the President look good, regardless of whether its good for the economy and the American people, they will do everything they can to block it!

[Papa Tightwad]

11:08 AM on 08/31/2011

Reason 4:

Unemployment Benefits keep getting extended....and the liquor store opens at 8am

[TimRivers]

01:57 PM on 08/31/2011

That fits the sterotype that all unemployed people are naturally lazy alcoholics. Just like the sterotype that all tightwads are greedy immoral people who look down on everyone else.

Sounds great to say it, and probably makes you feel superior for it, but it doesn't have any basis in "facts"!

[Papa Tightwad]

03:57 PM on 08/31/2011

I certainly know all unemployed aren't lazy alcoholics. I personally know many 99ers who have admittedly abused their extended benefits and put off job hunting because they were enjoying their time off and not really looking for work (nor being very realistic about what they are willing to accept as a job, and find time to complain to me). Not a ton, but about a dozen folks. That's a problem with unemp. benies extended as it was. I think those folks are capable of more and a burden to our system, and if I know a dozen or so I'm sure most people know more. That stinks.

I don't know where the immoral connection comes in for tightwads though. I just don't spend what I don't have, and I certainly don't feel superior. I'm just an average dude here, that isn't even wealthy by Obama's definition ($200k plus family income). I live within my means, and appreciate my good fortune, and do what I can to help those in my community and church (BTW a liberal church...Glenn Beck hates our congregation). I'm a realist doing my part, and trying to be a sarcastic boob that laughs and moves on when I can. And those are the facts Tim.

[Hotness]

08:42 AM on 09/01/2011

extending unemployment handouts extends unemployment. And if you don't like it as a fact take it as a reality. Even the liberal weenie's new keynesian advisor see this. You people are so _______.

[angry in ct]

04:31 PM on 08/31/2011

And how would you know that a liquor store opens at 8 AM?

[signgrrl]

10:18 PM on 08/31/2011

very good question. i've been out of work for just over a year, still have had no need to find a liquor store that opens that early . . . .

[grrchrds]

10:04 AM on 08/31/2011

Wow! I wish I could have went to an Ivy League college so I would have been smart enough to come up with those totally amazing findings.

[libertymen]

07:19 AM on 08/31/2011

How do you stop looking when you need to have ajob to survive?
Do these folks just curl up in the fetal position and die?
Can GOVT employ these long term folks,I mean all of them,not just people with pull?

[1dabut1]

12:51 PM on 08/31/2011

i applied for one job, i got there around 9, 9:30, the warehouse mangager told me there had been 20 application's since 7 in the morning, people from 20 to 60, and this is all in house, no add in the paper , just word of mouth, you can joke or be as--oles all you want, but unless you're in this boat you are only sounding like fools. you think i want to lose my house, and i don't own a mac mansion, two bedroom, nothing fancy. this sucks. i wish i could get boehner and the rest of the gop/baggers off of face book, and get them after the so called job creators, start creating jobs.

[Hotness]

08:48 AM on 09/01/2011

Because they aren't as bad off as they claim. They find money when needed...family, off the book work, live with others. Its done all of the time...stop believing these people and their doom and gloom. Anyone who puts in real effort looking for work can get a job in 3 years. Puhhleeze.

[Spengolf]

07:09 AM on 08/31/2011

The three reason Mr. Krueger all valid points but with a little more effort in his study, along with his associate, he would've found .4 A like of money to really do a more in depth search for jobs because of the higher price of gas and transportation. .5 The loss of their credit rating because of their mortgage payment constantly being late or no payment at all. Along with monthly rental fees because they had to relocate themselves and their families to an apartment or living with their parents or another family member. All of these should be considered when doing a precise study of why the long-term unemployed dropped from the ranks of job searching