Statistical Discrimination and Unemployed Workers

Help-Wanted Ads Exclude the Long-Term Jobless - NYTimes.com:

The unemployed need not apply. That is the message being broadcast by many of the nation’s employers, making it even more difficult for 14 million jobless Americans to get back to work.

A recent review of job vacancy postings on popular sites like Monster.com, CareerBuilder and Craigslist revealed hundreds that said employers would consider (or at least “strongly prefer”) only people currently employed or just recently laid off. there are legitimate reasons that many long-term unemployed workers may not be desirable job candidates. In some cases they may have been let go early in the recession, not just because business had slowed, but because they were incompetent....
Idle workers’ skills may atrophy, particularly in dynamic industries like technology. They may lose touch with their network of contacts, which is important for people in sales. Beaten down by months of rejection and idleness, they may not interview well or easily return to a 9-to-5 schedule.

“We may be seeing what’s called statistical discrimination,” said Robert Shimer, a labor economist at the University of Chicago. “On average, these workers might be less attractive, and employers don’t bother to look more closely to pick out the good ones.”Employers receive so many applications for each opening that some may use current employment status as an easy filter. ...
...Many firms that are not intentionally screening out the unemployed may still disqualify such applicants for having bad credit histories after having fallen behind on the bills — which they of course need a job to pay.
...The best solution, economists say, would be to encourage job growth more broadly, which may initially involve poaching people from other companies but could eventually draw even the least desirable workers back into jobs. During the boom years of the late ’90s, the labor market was so tight that ex-convicts had relatively little trouble finding work.