If you’ve been out of work for a while, you should probably be less optimistic. That’s the gist of a new recently released report.
In the paper, researchers analyze job seekers’ perceptions about their employment prospects and the relationship of those perceptions to employment outcomes.
They found that “job seekers are over-optimistic in their beliefs, particularly the long-term unemployed, and that job seekers do not revise their beliefs downward when remaining unemployed.” In other words, the long term unemployed continue to hold out hope that they will find a job any day now, despite evidence to the contrary.
That doesn’t sound so bad, right? I mean, you don’t want people to be losing hope. That would be terrible. Except that what they also found is that failure to adjust one’s expectations accordingly leads to longer-term unemployment.
The authors wrote: “We found that job seekers’ beliefs are systemically biased and under-respond to differences in job finding rates across job seekers, that is over-optimistic job seekers are less likely to find jobs and thus select into long-term unemployment.”
They found that people continued to hold out for the jobs and wages they wanted, or thought they deserved, rather than taking a lower paying position to get out of unemployment. And that this leads to longer term unemployment.
They also found that people tend to significantly overestimate their likelihood of finding work.
For example, in one part of the study, unemployed people surveyed reported that they thought they had a 26% probability of finding a job, while the actual probability was 10%. Furthermore, the same people actually got more optimistic as time passed, increasing their probability predictions by 2% per month.
In reality, the longer you’re out of work, the less likely you are to get a job. There is a well-documented employer bias against the unemployed. Studies show that unemployment is like poison on your resume, and that companies actually prefer candidates with no relevant experience to those with a relevant background who had been out of work for “a stretch.”
This means that, if you are experiencing a long term of unemployment, your smartest route is probably to adjust your expectations and to start looking at jobs you might not have otherwise accepted.
Or look to the gig economy, which has grown in epic proportions in recent years. Look into contract of freelance work to fill the time and earn some money.
You’re much better off looking for work from a place of employment rather than unemployment.