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

The enduring sandwich: What's not to like about bread and fillings?
94342 2018-09-23 00:00:00Z Food

The enduring sandwich: What's not to like about br…

by Margo White

Despite an apparent backlash against bread – against carbohydrates and gluten – the sandwich endures.

Read more
Humanity is on 'the highway to digital dictatorship', says Yuval Noah Harari
96527 2018-09-22 00:00:00Z Social issues

Humanity is on 'the highway to digital dictatorshi…

by Andrew Anthony

The author of worldwide bestsellers Sapiens and Homo Deus says our free will is at stake. We talk to Yuval Noah Harari about his new book.

Read more
Why there's no 'clash of civilisations' between Islam and the West
96558 2018-09-22 00:00:00Z Social issues

Why there's no 'clash of civilisations' between Is…

by Yuval Noah Harari

There is just one civilisation in the world, writes Yuval Noah Harari, and the West and Islam are joint participants in it.

Read more
The Kiwi cicada expert who's just 11 years old
94985 2018-09-22 00:00:00Z Science

The Kiwi cicada expert who's just 11 years old

by Ken Downie

Hamilton entomologist Olly Hills isn’t in high school yet, but he’s already a world expert – and he wrote a book.

Read more
Thackeray's Vanity Fair gets a clever update for the millenial age
96633 2018-09-22 00:00:00Z Television

Thackeray's Vanity Fair gets a clever update for t…

by Russell Brown

A new TV version of William Makepeace Thackeray’s 19th-century satirical novel taps into today's celebrity-Instagram culture.

Read more
The debate over the Serena Williams controversy was a dialogue of the deaf
96659 2018-09-22 00:00:00Z Sport

The debate over the Serena Williams controversy wa…

by Paul Thomas

Serena Williams’ US Open outburst was unbecoming but the umpire made a mess of his response.

Read more
The classical blokes saluting unsung women composers
96670 2018-09-21 14:16:06Z Music

The classical blokes saluting unsung women compose…

by The Listener

The suffrage celebrations get a soundtrack from all-male ensemble NZTrio.

Read more
Labour MPs stand behind Jacinda Ardern's action on Meka Whaitiri
96630 2018-09-21 07:31:30Z Politics

Labour MPs stand behind Jacinda Ardern's action on…

by Gia Garrick

The public will have to wait to see a report into an assault claim against MP Meka Whaitiri, who was yesterday stripped of her ministerial portfolios.

Read more