New evidence that losing your job is even more stressful for black Americans

Tuesday, August 21, 2018

Losing one’s job is a painful event for anyone, requiring a job-search and potential relocation for new employment. Depending on the circumstances, it may also require acquiring new skills through additional training—an extra cost that’s particularly difficult to cover if you just lost your job. An important new paper from economists at Washington and Lee, the New School, and Duke finds that the stress that results from being unemployed isn’t experienced equally across races, and that losing your job takes a much bigger toll on your mental health if you’re black.

Looking at the psychological effects of unemployment during the Great Recessions, the authors find that short-term (less than 16 weeks) unemployment was associated with a higher level of psychological distress for blacks than for whites. Interestingly, they find little to no statistically significant difference in distress when looking at the effect of long-term unemployment on mental health.

What might account for this difference in unemployment experiences by race? A likely candidate is the difference in wealth by race. A long-term unemployment spell is a major concern for everyone– it is serious and will likely cause significant turmoil and distress in any household. Therefore, it is not surprising that the authors do not find significant differences between races in long-term unemployment spells on mental health measures; everyone is equally worried about their futures.

Read the full article here