Answer: 5.6 periods

A great question demonstrating the importance of having an emergency savings account. 

Questions:

• What do you think are some of the reasons that people have periods of unemployment?
• Do you think it's easier to be out of work when you are in your 20s or 40s? Explain.
• How do people support themselves when they don't have a job? 
• What do you think are steps that you can take to reduce the odds that you are out of a job? 

Here's the ready-to-go slides for this Question of the Day that you can use in your classroom.

Behind the numbers (NATIONAL BUREAU OF ECONOMIC RESEARCH):

Yet the lifetime risk of important negative events is substantial: estimates from the NLSY79 of the population-based observed risks show that baby boomers experienced an average of 5.6 periods of unemployment from age 18 to age 48 and had an almost 70 percent likelihood of experiencing at least three periods of unemployment during that span (U.S. Bureau of Labor Statistics 2018). The probability of divorce within 20 years after first marriage was 48 percent for women and 44 percent for men in 2006-2010 (Copen et al. 2012). We know of no data on individuals’ subjective beliefs about the lifetime likelihood of such major adverse life events, 1 but one piece of evidence is that individuals tend to be overly optimistic with respect to their own health risks (Weinberg 1980; Dunning, Heath and Suls 2004). 

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For more on the importance of education and its relationship to employment outcomes...check out this NGPF Data Crunch: What’s The Relationship Between Education and Unemployment?

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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