Laid-off workers suffer effects for years - study

by Patrick O'Meara / 30 May, 2017
Losing your job can have lasting effects on your finances. Photo /Getty
Workers made redundant suffer lasting effects on their employment and income prospects, even with government support, a study has found.

Motu Economic and Public Policy Research Trust tracked those made redundant in New Zealand between 2001 and 2010.

It found their chances of finding work were 20-25 percent lower after the first year, compared with those who had not stopped working - and while their prospects improved over time, the rate was still 8-12 percent lower five years later.

The results for income levels were similar.

The earnings of the workers made redundant were 25-30 percent lower than their counterparts in the first year, and 13-22 percent lower after five years.

One of the authors, Dean Hyslop of Motu, said those who had been in the workforce for a while were likely to find it harder to get back on their feet.

"They've more likely than not to have built up specific human capital and skills associated with their job.

"Losing that makes it difficult for them to find other work," Dr Hyslop said. "Even if they find work they're unlikely to be finding work that they have the skills to be compensated for."

The impact was worse for workers who lost jobs during the financial crisis from 2008.

"The employment effect for workers who lost their jobs in the global financial crisis was 3-4 percentage points worse than for those who became displaced before then," Dr Hyslop said.

Government benefits provided some support for laid-off workers, but Dr Hyslop said the shortfall was still substantial.

"Workers who lost their jobs in the previous year received benefits 6-11 percent more often than comparable workers, and 3-4 percent more often after five years," said Dr Hyslop.

"However, despite such income support, displaced workers' total individual income was about 30 percent lower than comparable workers during the first year after displacement, and about 20 percent lower after five years."

Dr Hyslop said retraining programmes could make a difference for those laid off, and income insurance could be an option for some.

In April, an OECD study reported New Zealand workers who found new jobs after being laid off were considerably worse off than their peers, and more should be done to help them.

This article was first published on RNZ. 

Latest

How to eat a New Zealand forest, and other secrets
108277 2019-07-18 00:00:00Z Planet

How to eat a New Zealand forest, and other secrets…

by Sally Blundell

Our native forests provide food and natural medicines, support jobs, hinder erosion and play a major role in climate-change mitigation.

Read more
Simon Bridges searches for a miracle
108491 2019-07-17 00:00:00Z Politics

Simon Bridges searches for a miracle

by Graham Adams

The opposition leader hoped to pick up election-winning tips in Australia.

Read more
Pumla Gobodo-Madikizela on the tragedy of post-apartheid South Africa
108416 2019-07-17 00:00:00Z Profiles

Pumla Gobodo-Madikizela on the tragedy of post-apa…

by Clare de Lore

Scathing critic of South African Government corruption Pumla Gobodo-Madikizela, here to give a public lecture, has insights about forgiveness after...

Read more
Writer Robert Macfarlane finds deeps truths in Underland
108287 2019-07-17 00:00:00Z Books

Writer Robert Macfarlane finds deeps truths in Und…

by Tony Murrow

In a new book, Robert Macfarlane heads underground to ponder mankind’s effect on the planet.

Read more
Why extra virgin olive oil is back on the menu for frying
108203 2019-07-17 00:00:00Z Nutrition

Why extra virgin olive oil is back on the menu for…

by Jennifer Bowden

For decades, the word in the kitchen has been that olive oil shouldn’t be used for frying, but new research could change that.

Read more
Abstract artist Gretchen Albrecht's true colours
108108 2019-07-16 00:00:00Z Profiles

Abstract artist Gretchen Albrecht's true colours

by Linda Herrick

Gretchen Albrecht paintings may be intangible, but they are triggered by real-life experience, she tells Linda Herrick.

Read more
That's a Bit Racist is playful, but it packs a punch
108435 2019-07-16 00:00:00Z Television

That's a Bit Racist is playful, but it packs a pun…

by Diana Wichtel

The taboo-busting doco is trying to change our default settings on race, but some people aren't stoked.

Read more
Are there too many tourists in NZ?
108444 2019-07-16 00:00:00Z Life in NZ

Are there too many tourists in NZ?

by North & South

Here's what's inside North and South's August 2019 issue.

Read more