Richmond Fed, Report: Why Do Long-Term Unemployed Workers Struggle to Find New Jobs?

“We estimate substantial heterogeneity in the job finding probabilities, as summarized by our decomposition exercise. Some workers typically take a long time to find jobs but face little risk of permanent joblessness. Others typically find jobs quickly, but when they do not, they face a heightened risk of never returning to work. This heterogeneity is important for the impact of unemployment benefits on unemployment duration, as well as for the distributional impact of the unemployment benefit system.”