Costs of Unemployment
18 February 2009
In an interview on Radio 4's PM programme, Professor Paul Gregg (Economics Department and CMPO) considered it very likely that the unemployment count in the UK will reach 3 million over the current recession. He estimated the cost to the Treasury of unemployment to average around £8,000 per unemployed person per year, a figure that includes lost tax revenues to government (around £3,000 per person-year) as well as the direct costs of unemployment and other benefits.In the interview Professor Gregg also stressed the 'scarring' effects of long-term unemployment. He estimated that long periods of unemployment reduce life-time earnings by around 10-12% as many unemployed individuals resume employment in low-pay jobs with less secure tenure.
Use this link for an MP3 version of the full interview.
Unemployment won't stop rising until the end of 2010 at the earliest.
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