Minister Launches ESRI Report that Helps to Identify Those at Risk of Long-term Unemployment

04/09/2009

Minister Launches ESRI Report that Helps to Identify Those at Risk of Long-term Unemployment

People at greatest risk of long-term unemployment have been identified by new research. The study, launched today by Minister for Social and Family Affairs, Mary Hanafin, could form the basis for a national profiling system to tackle long-term unemployment caused by the recession. National Profiling of the Unemployed in Ireland, conducted by the ESRI in partnership with the Department of Social and Family Affairs (DSFA), tracked the status of approximately 60,000 claimants on the Live Register over an 18 month period. The method allowed researchers to create a statistical profile of people at most risk of long-term unemployment. The most important risk factors were:

• relatively low education
• literacy/numeracy problems
• a recent history of long-term unemployment
• low rates of recent labour market engagement
• previous participation on the Community Employment (CE) scheme
• advanced age
• number of children
• spouse’s earnings
• geographic location.

  Interesting gender differences did emerge, however. Women who are married or separated are less likely than single women to leave the Live Register, as are those females whose spouses are high earners. The negative impact of children on the likelihood of getting a job is also greater for women, whereas the negative effect of age is bigger for men. Unemployment has risen from less than 5% in January 2008 to over 12% in August 2009 and is expected to rise further over the next 12 months. This dramatic increase has generated enormous pressure on the public employment services, particularly the DSFA and FÁS. The ESRI statistical profiling model could be used as the basis for a national profiling system. If implemented, the system could rank claimants according to their risk of becoming long-term unemployed, providing a fair and rigorous basis on which to allocate interventions and to target those most at risk of long-term unemployment. To realize the benefits of the system, profiling would need to be combined with effective training and employment programmes that enhance the employment prospects of their participants. Research has shown that the prevention of long-term unemployment is important from both economic and social perspectives. Long-term unemployed individuals suffer from skill erosion and frequently encounter difficulty in re-entering employment. For the wider economy, welfare payments and lost revenue mean that long-term unemployment entails substantial financial costs. The data used to develop the profiling model came from a specially designed survey administered by the DSFA to all individuals that claimed Jobseeker’s Benefit or Allowance between September and December 2006. The profiling model predicts the likelihood that people leave the Live Register within 12 months with a high degree of accuracy. While economic conditions have changed radically since the data used in this report were collected, it is unlikely to undermine the accuracy and predictive power of the profiling model. The principal factors found to drive the risk of long-term unemployment - e.g. low levels of education, history of long-term unemployment, literacy/numeracy problems, - do not vary with labour market conditions. ******************************************** National Profiling of the Unemployed in Ireland, by Philip J. O’Connell, Seamus McGuinness, Elish Kelly and John Walsh (Economic and Social Research Institute), will be published online on 4 September and available to download from the ESRI website.