Growth Trends for Related Jobs

The Impact of Unemployment on an Individual

careertrend article image
Jupiterimages/BananaStock/Getty Images

Not all people respond to unemployment in the same manner. The impact of unemployment on an individual depends on a variety of factors. An individual's savings, unemployment benefits and education play a part in how much of an impact he experiences because of unemployment. Understanding the negative effects of unemployment helps people to cope and prepare themselves to seek other employment opportunities.


In many cases, unemployment causes people to suffer from stress and depression. The inability to pay bills on time and to keep up with current living standards places a burden on individuals, and they find themselves stressed because of situations that are out of their control. According to authors Deborah Belle and Heather E. Bullock of the Society for the Psychological Study of Social Issues, unemployment is directly related to many physical and mental problems. The stress people suffer because of unemployment can also negatively affect their families and cause hostile living situations.

Financial Hardship

The most immediate impact of unemployment on an individual is the loss of income. The size of the impact depends on whether the individual receives unemployment benefits or has money saved to take care of living expenses until suitable employment is found. Some people fall so far behind on bills that they experience the repossession of cars, foreclosure on homes and a decline in their credit scores. Many unemployed workers also lose their health care benefits. The federal government offers a continuation of health insurance coverage through COBRA, but the cost to continue coverage is often too high for unemployed people.


Workers experiencing prolonged unemployment periods often suffer from low self-esteem. Many workers not able to find jobs discontinue looking after a certain period and are considered discouraged workers. The constant rejection from employers can make workers feel inadequate. A high self-esteem is important for workers to carry into interviews with potential employers. Recruiters desire to hire workers confident in their abilities to fulfill the required duties. Also, employers look for employees with positive attitudes. Unemployed people with low self-esteem must find ways to build their confidence to make good impressions with interviewers.

Lifestyle Changes

Some long-term unemployed workers experience lifestyle changes. For instance, some individuals who can no longer afford their rent or mortgage are forced to move in with relatives. For many adult workers, this is a difficult adjustment that greatly impacts their lifestyles. Some individuals seek government assistance, such as food stamps, for the first time in their lives. People not experiencing such severe changes could still cut luxury items from their lives. Vacations and shopping trips often are delayed or canceled. In other cases, individuals are forced to sell their personal belongings to pay bills. All of these circumstances alter the lifestyles of unemployed workers.