Hard Choices: Navigating the Economic Shock of Unemployment

QUICK SUMMARY

Hard Choices: Navigating the Economic Shock of Unemployment explores how families weather job loss, with specific attention to differences by race and family income.

To provide greater insight into the challenges and choices families face, the report also draws on a unique set of in-depth interviews with 51 families who were unemployed for one month or more between 1998 and 2010.

The study finds that while families at every rung of the economic ladder experienced unemployment, their ability to withstand and recover from losses differed dramatically:

• Low-income families and those of color had both the greatest risk of job loss and the least access to resources to buffer negative effects.
• Families who had some unemployment not only lost income while not working, but also experienced longer-term wealth losses.
• Those without personal savings and kinship support frequently used resources they had allocated for their children's education or their own retirement to fund short-term needs.
• Those who experienced unemployment between 1999 and 2009 were 1.3 times more likely to have suffered a loss in wealth during the decade than other families.

Family Interviews

The stories in this report provide rich detail on family's efforts to patch together a variety of resources and strategies during periods of unemployment, including: household financial assets; family, friends and kinship networks; credit, debt and loans; and assistance from government and community-based organizations.

They highlight that unemployment and the trade-offs it requires affect families' short-term economic security and their long-term mobility prospects. 

The report's findings also provide insight for policymakers seeking to help families build assets that can protect them in times of need and provide a foundation for future upward mobility.