Title: The Cost of Unemployment to the Economy
Headings: The Cost of Unemployment to the Economy
The Cost of Unemployment to the Economy
It’s not just the price of paying out benefits
Key Takeaways
Costs to the Individual
Costs to Society
Costs to the Country
The Bottom Line

Content: Studies have shown that prolonged unemployment harms the mental health of workers and can worsen physical health and shorten lifespans. 6 ﻿ 7 ﻿
Costs to Society
The social costs of unemployment are difficult to calculate but no less real. When unemployment becomes a pervasive problem, there are often increased calls for protectionism and severe restrictions on immigration. 8 ﻿ Protectionism can not only lead to destructive tit-for-tat retaliation among countries but reductions in trade harm the economic well-being of all trading partners. Other social costs include how people interact with each other. Studies have shown that times of elevated unemployment often correlate both with less volunteerism and higher crime. 9 ﻿ 10 ﻿ Elevated crime makes sense, because absent a wage-paying job, people may turn to crime to meet their economic needs. The volunteerism decline does not have an obvious explanation, but could perhaps be tied to the negative psychological impacts of being jobless or perhaps even resentment toward those who do not have a job. The Coronavirus Aid, Relief, and Economic Security (CARES) Act has expanded unemployment benefits to self-employed and part-time workers. Costs to the Country
The economic costs of unemployment are probably more obvious when viewed through the lens of the national checkbook.