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Student’s unemployment research leads to White House visit

Research con­ducted by North­eastern unem­ploy­ment expert Rand Ghayad helped per­suade a score of cor­po­rate chief exec­u­tives to attend a meeting at the White House on Friday to dis­cuss Pres­i­dent Barack Obama’s new ini­tia­tive to combat long-​​term joblessness.

“Every­body was saying they wouldn’t be here today if not for this research,” said Ghayad, a doc­toral stu­dent of eco­nomics who was invited to the meeting by Gene Sper­ling, the president’s national eco­nomics adviser. “I never thought my work would be so inter­esting to other people.”

In response to Ghayad’s studies and others like it, Obama has per­suaded more than 300 busi­nesses to sign a pledge to halt hiring prac­tices that dis­crim­i­nate against the long-​​term unem­ployed. Forty-​​seven of the country’s top 200 cor­po­ra­tions have agreed to the new poli­cies, including Apple, Wal-​​Mart, and Gen­eral Motors.

Obama announced his ini­tia­tive to help the long-​​term unem­ployed in his State of the Union Address last Tuesday, telling Amer­i­cans, “I’ve been asking CEOs to give more long-​​term unem­ployed workers a fair shot at new jobs, a new chance to sup­port their families.”

Ghayad’s research on unem­ploy­ment dis­crim­i­na­tion and long-​​term job­less­ness has been well cited. In December of 2012, his work on why long-​​term unem­ploy­ment has remained stag­nant was pub­lished by the Fed­eral Reserve Bank of Boston, where he is cur­rently a vis­iting scholar. The Atlantic called the paper “pio­neering,” while Nobel Prize-​​winning econ­o­mist Paul Krugman noted in his New York Times blog that Ghayad’s work high­lights “exactly the kind of thing we should fear, because it means that failure to address the slump is dam­aging the economy’s long run-​​prospects.”

In order to find out why his friends were having dif­fi­culty finding work in the wake of the reces­sion, Ghayad sent out 4,800 fic­ti­tious résumés to com­pa­nies with job open­ings. The only dif­fer­ence among the appli­cants was the amount of expe­ri­ence and length of unem­ploy­ment. What he found was an “unem­ploy­ment cliff”—once people had been unem­ployed for six months or more, their chances of being hired plum­meted, even when their résumés were exactly the same as those who had been unem­ployed for less time.

His new, though as-​​yet-​​unpublished, study builds on his ini­tial find­ings, sug­gesting that the long-​​term unem­ployed face dis­crim­i­na­tion in the labor market.

This time, he sent out 3,500 fic­ti­tious résumés to com­pa­nies with job open­ings. Once again, the only dif­fer­ence among the appli­cants was the amount of expe­ri­ence and length of unem­ploy­ment. What he found was that recently unem­ployed appli­cants with no rel­e­vant expe­ri­ence were more likely to be invited for an inter­view than those with expe­ri­ence who have been unem­ployed for more than six months.

The upshot is that many oth­er­wise well-​​qualified can­di­dates get screened out of the hiring process based solely on a his­tory of unem­ploy­ment. What’s dis­cour­aging is that some well-​​qualified can­di­dates are over­looked not by hiring man­agers or HR per­sonnel, Ghayad said, but by soft­ware pro­grams designed to screen out the long-​​term unem­ployed regard­less of their experience.

Ghayad’s ulti­mate solu­tion to com­bat­ting long-​​term unem­ploy­ment is to pump more cash into the economy at extremely low interest rates. With access to more cash, firms can hire more employees, including the job seekers at the back of the queue. “Once you create more jobs and boost the economy, there’s no reason to screen out appli­cants the way employers are doing it right now,” he said.

Obama agrees. “Every job appli­cant deserves a fair shot,” he told reporters on Friday. “Just because you’re out of work for a while doesn’t mean you’re not a hard worker.”

– By Jason Kornwitz

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