Stigmatisation on Grounds of Unemployment Hinders Returning to Labour Market

The recession does not stop at Germany’s borders, and many Germans have lost their jobs. In times of economic weakness, employers blame applicants’ unemployment on the economic situation, instead of blaming applicants themselves. During a boom phase, however, things are different. If the economy thrives, employers tend to make applicants’ lack of productivity responsible for their unemployment. This is the result of a recent study analysing effects of stigmatisation on unemployed males, conducted by the Centre for European Economic Research (ZEW) in Mannheim.

The study analyses data from the German Socio-Economic Panel from 1991 until 2004. Using an econometric model combining socio-demographic data for unemployed and employed (not self-employed) males aged 26 to 56, ZEW researchers were able to prove stigmatisation effects. "Employers suppose that it is highly unlikely to be out of work in times of economic prosperity. Being unemployed in a bullish state is thus interpreted as a sign of low productivity. This lowers the applicant’s chance of being hired," says Susanne Steffes, labour market expert at ZEW. "In a bearish state, unemployment is ascribed to the overall economic situation instead of individual qualities".

The study also determines the point in time employers keep in mind when judging an applicant’s unemployment. The results show that the economic situation at the time of the applicant’s job loss does not influence the employer’s decision. Rather, it is the current economic situation which the employer keeps in mind. This means that in times of high unemployment, employers do not take into account the time in which the applicant became jobless, even if this was during a boom phase.

For further information please contact

Dr. Susanne Steffes, Phone: +49/621/1235-281, Fax: -225, E-mail: steffes@zew.de