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 The importance of biodiversity in forests could increase due to climate change
17.11.2017 | Deutsches Zentrum für integrative Biodiversitätsforschung (iDiv) Halle-Jena-Leipzig

nachricht Win-win strategies for climate and food security
02.10.2017 | International Institute for Applied Systems Analysis (IIASA)

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: A “cosmic snake” reveals the structure of remote galaxies

The formation of stars in distant galaxies is still largely unexplored. For the first time, astron-omers at the University of Geneva have now been able to closely observe a star system six billion light-years away. In doing so, they are confirming earlier simulations made by the University of Zurich. One special effect is made possible by the multiple reflections of images that run through the cosmos like a snake.

Today, astronomers have a pretty accurate idea of how stars were formed in the recent cosmic past. But do these laws also apply to older galaxies? For around a...

Im Focus: Visual intelligence is not the same as IQ

Just because someone is smart and well-motivated doesn't mean he or she can learn the visual skills needed to excel at tasks like matching fingerprints, interpreting medical X-rays, keeping track of aircraft on radar displays or forensic face matching.

That is the implication of a new study which shows for the first time that there is a broad range of differences in people's visual ability and that these...

Im Focus: Novel Nano-CT device creates high-resolution 3D-X-rays of tiny velvet worm legs

Computer Tomography (CT) is a standard procedure in hospitals, but so far, the technology has not been suitable for imaging extremely small objects. In PNAS, a team from the Technical University of Munich (TUM) describes a Nano-CT device that creates three-dimensional x-ray images at resolutions up to 100 nanometers. The first test application: Together with colleagues from the University of Kassel and Helmholtz-Zentrum Geesthacht the researchers analyzed the locomotory system of a velvet worm.

During a CT analysis, the object under investigation is x-rayed and a detector measures the respective amount of radiation absorbed from various angles....

Im Focus: Researchers Develop Data Bus for Quantum Computer

The quantum world is fragile; error correction codes are needed to protect the information stored in a quantum object from the deteriorating effects of noise. Quantum physicists in Innsbruck have developed a protocol to pass quantum information between differently encoded building blocks of a future quantum computer, such as processors and memories. Scientists may use this protocol in the future to build a data bus for quantum computers. The researchers have published their work in the journal Nature Communications.

Future quantum computers will be able to solve problems where conventional computers fail today. We are still far away from any large-scale implementation,...

Im Focus: Wrinkles give heat a jolt in pillared graphene

Rice University researchers test 3-D carbon nanostructures' thermal transport abilities

Pillared graphene would transfer heat better if the theoretical material had a few asymmetric junctions that caused wrinkles, according to Rice University...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Ecology Across Borders: International conference brings together 1,500 ecologists

15.11.2017 | Event News

Road into laboratory: Users discuss biaxial fatigue-testing for car and truck wheel

15.11.2017 | Event News

#Berlin5GWeek: The right network for Industry 4.0

30.10.2017 | Event News

 
Latest News

Antarctic landscape insights keep ice loss forecasts on the radar

20.11.2017 | Earth Sciences

Filling the gap: High-latitude volcanic eruptions also have global impact

20.11.2017 | Earth Sciences

Water world

20.11.2017 | Life Sciences

VideoLinks
B2B-VideoLinks
More VideoLinks >>>