Duration of Unemployment
Another key question concerns duration. How much of the unemployment experience is long term and of major social concern, and how much is short term as people move quickly between jobs? Figure 31-7 shows the duration of unemployment . in full-employment year of 1999. A surprising feature of American labor markets is that a very large fraction of unemployment is of short duration. In 1999, two-fifths of unemployed workers were jobless
for less than 5 weeks, and long-term unemployment was rare.
In Europe, with .lower mobility and greater legal obstacles to economic change, long-term un employment in the mid-l990s reached 50 percent of the unemployed. Long-term unemployment poses a serious social ‘problem because the resources that families have available-their savings, unemployment insurance, and goodwill toward one another-begin to run out after a few months.