When my friend Nicola quit her job in edu­ca­tional pub­lishing, it was for under­stand­able rea­sons: one of her col­leagues was a bully, her boss was pro­viding little sup­port and work had become mis­er­able. (I’ve changed her name.) She had a strong CV, a hus­band with a steady job and young chil­dren to spend time with so she decided to resign before finding a new job. She’s now been unem­ployed for a year and a half.

So many economies have been depressed for so long that Nicola’s predica­ment is common. But new and unpub­lished research from a young Lebanese PhD stu­dent, Rand Ghayad of North­eastern Uni­ver­sity in Boston, shows with hor­rible clarity what a wretched trap long-​​term unem­ploy­ment is becoming.

(April was a good month for eco­nomics stu­dents else­where in Mass­a­chu­setts: Thomas Herndon of the Uni­ver­sity of Mass­a­chu­setts, Amherst, deliv­ered a rep­u­ta­tional kneecap­ping to Har­vard pro­fes­sors Carmen Rein­hart and Ken Rogoff when he dis­cov­ered a spread­sheet error in their much-​​trumpeted paper “Growth in a Time of Debt” as part of a course assignment.)

Ghayad used a com­puter pro­gram to gen­erate job appli­ca­tions that were stan­dard­ised but varied along a few para­me­ters – whether the imag­i­nary appli­cant had worked in the rel­e­vant industry, had hopped a lot between jobs, and how long the appli­cant had been unem­ployed, if at all. Ghayad mailed 4,800 of these CVs off to apply for 600 vacan­cies, chosen to reflect a variety of city loca­tions, seniority and industry. He then recorded which appli­ca­tions were offered an interview.



Read the article at Financial Times →