Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Damaging effects of unemployment and unexpected wealth losses on mobility and economic security

04.04.2013
Position on economic ladder and race impact recovery

Washington–A new study from The Pew Charitable Trusts, "Making Hard Choices: Navigating the Economic Shock of Unemployment," examines how American families cope with unexpected financial setbacks and how those periods of economic uncertainty draw down financial resources. The report studies families across race and income levels, revealing different experiences resulting from unemployment and the difficult choices many of them face.

Building upon Pew's prior research, this report underscores the significance of financial resources other than income, particularly savings and assets, in defending family economic security and the health of the American Dream.

"Even during periods of strong economic growth, unanticipated financial shocks can harm a family's prospects for upward mobility," said Erin Currier, Pew's economic mobility expert. "Savings and assets play a critical role in ensuring that families can build the resources to protect themselves in times of need and preserve the well-being of their children."

Analysis for "Navigating the Economic Shock of Unemployment" was conducted by researchers at the Institute on Assets and Social Policy at Brandeis University. Using a combination of quantitative and qualitative analysis, the study takes a close look at varying experiences of unemployment across race and family income from 1999 to 2009.

The research shows that families at every rung of the economic ladder experienced unemployment and other financial setbacks, but families at the bottom of the income ladder, Latinos, and blacks had the greatest risk of job loss and the least access to resources to buffer negative impacts. For example, when comparing households that experienced unemployment, the median wealth of white households was at least seven times that of black households in each year of the study.

Additionally, families who experienced unemployment in the ten-year period were 1.3 times more likely to have experienced a loss in wealth during the decade than other families, even when controlling for marital status, change in family income over the study period, head-of-household gender, race, and education.

In-depth interviews conducted with 51 families that endured unemployment provide insight into how disparities in income and wealth affect how families react to and cope with economic shock. Respondents recalled:

Tapping into resources originally allocated for their children's education or their own retirement;

Taking out risky small-dollar loans with high fees; and
Depleting assets in order to meet qualifications for public assistance.

The patchwork of resources families use -- including depletion of household financial assets; family, friends, and kinship networks; credit, debt, and loans; and institutional resources -- affect not only families' short-term economic security, but also their long-term mobility prospects as well as those for their children.

"The evidence in this report provides insight into the actions that policymakers can take to help people who have experienced unemployment," said Janet Boguslaw, researcher at Brandeis' Institute on Assets and Social Policy. "There is no question that providing mechanisms for Americans to hold and secure assets in good times and in bad will help them and the economy as a whole over the long run."

Boguslaw and her colleagues propose the following policy options in the report:

Revise the savings tax incentive structures to encourage families to build emergency financial assets;

Provide low-cost loan options available to families in times of economic need;
Remove disincentives to savings and work in government safety-net programs;
Reform the unemployment insurance system to better meet current labor market realities;

And, help low- and moderate-wealth families take advantage of opportunity investments.

This work was supported in part by the Charles Stewart Mott Foundation.

The Institute on Assets and Social Policy develops strategies, processes, and policy alternatives that enable vulnerable populations to build resources and access opportunities to live securely and participate fully in all aspects of social and economic life. The Pew Charitable Trusts is a nonprofit organization that applies a rigorous, analytical approach to improve public policy, inform the public, and stimulate civic life.

Charity Adams | EurekAlert!
Further information:
http://www.brandeis.edu

More articles from Studies and Analyses:

nachricht Real-time feedback helps save energy and water
08.02.2017 | Otto-Friedrich-Universität Bamberg

nachricht The Great Unknown: Risk-Taking Behavior in Adolescents
19.01.2017 | Max-Planck-Institut für Bildungsforschung

All articles from Studies and Analyses >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Breakthrough with a chain of gold atoms

In the field of nanoscience, an international team of physicists with participants from Konstanz has achieved a breakthrough in understanding heat transport

In the field of nanoscience, an international team of physicists with participants from Konstanz has achieved a breakthrough in understanding heat transport

Im Focus: DNA repair: a new letter in the cell alphabet

Results reveal how discoveries may be hidden in scientific “blind spots”

Cells need to repair damaged DNA in our genes to prevent the development of cancer and other diseases. Our cells therefore activate and send “repair-proteins”...

Im Focus: Dresdner scientists print tomorrow’s world

The Fraunhofer IWS Dresden and Technische Universität Dresden inaugurated their jointly operated Center for Additive Manufacturing Dresden (AMCD) with a festive ceremony on February 7, 2017. Scientists from various disciplines perform research on materials, additive manufacturing processes and innovative technologies, which build up components in a layer by layer process. This technology opens up new horizons for component design and combinations of functions. For example during fabrication, electrical conductors and sensors are already able to be additively manufactured into components. They provide information about stress conditions of a product during operation.

The 3D-printing technology, or additive manufacturing as it is often called, has long made the step out of scientific research laboratories into industrial...

Im Focus: Mimicking nature's cellular architectures via 3-D printing

Research offers new level of control over the structure of 3-D printed materials

Nature does amazing things with limited design materials. Grass, for example, can support its own weight, resist strong wind loads, and recover after being...

Im Focus: Three Magnetic States for Each Hole

Nanometer-scale magnetic perforated grids could create new possibilities for computing. Together with international colleagues, scientists from the Helmholtz Zentrum Dresden-Rossendorf (HZDR) have shown how a cobalt grid can be reliably programmed at room temperature. In addition they discovered that for every hole ("antidot") three magnetic states can be configured. The results have been published in the journal "Scientific Reports".

Physicist Dr. Rantej Bali from the HZDR, together with scientists from Singapore and Australia, designed a special grid structure in a thin layer of cobalt in...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Booth and panel discussion – The Lindau Nobel Laureate Meetings at the AAAS 2017 Annual Meeting

13.02.2017 | Event News

Complex Loading versus Hidden Reserves

10.02.2017 | Event News

International Conference on Crystal Growth in Freiburg

09.02.2017 | Event News

 
Latest News

Stingless bees have their nests protected by soldiers

24.02.2017 | Life Sciences

New risk factors for anxiety disorders

24.02.2017 | Life Sciences

MWC 2017: 5G Capital Berlin

24.02.2017 | Trade Fair News

VideoLinks
B2B-VideoLinks
More VideoLinks >>>