Tuesday, May 26, 2009

Benefits of Unemployment

As always, when posting on a topic like this I restate that I can probably claim to be among the most active people in the country researching and examining negative psychological consequences of the current recession and I have written about these now almost continuously. My purpose in raising the current issue is not to be flippant or cute but to start a counterbalancing discussion to help make sure that the research I am doing does not skewed by too strong priors. During our journal club today, the issue of the beneficial effects of unemployment were raised. On average, there are now countless papers demonstrating an average negative effect of unemployment on psychological well-being but its worth thinking about potential upsides for different groups of people

- During the initial spell, many people carry with them a redundancy payment. For people without large mortgage debts this redundancy payment can potentially finance life-improving capital purchases.

- For people with a high chance of reemployment, a brief spell of unemployment may provide a chance to rebalance health and personal factors particularly if they have working extremely hard during a boom. For example, people may be able to spend some time getting closer to their children or performing necessary upgrades to their homes.

- Some people may have become habitually constrained to a job that was not satisfying. Forced redundancy can act as a habit-breaker leading people to reassess their prospects and aim higher. For example, people may set up small businesses or upskill or otherwise try to improve their prospects.

- Increased leisure time.

Anyway, worth keeping in mind in the upcoming work on well-being and recession.

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