Unemployment is often measured by the rate itself, yet this single variable does not reveal how different people are affected, depending on income, education, or personal circumstances. In some cases, those impacted may experience only a small income loss that is quickly offset, while in others the situation becomes far more complex and damaging.
In a striking observation, about 30 percent of the unemployed bear 90 percent of what is known as the social cost of unemployment. In other words, a minority bears the brunt of the loss in economic and social welfare that comes with joblessness. A study conducted by the BBVA Foundation and the Valencian Institute for Economic Research (Ivie) analyzes unemployment from a new angle and finds that, on average, the social cost of unemployment is lower than the regional average in the Valencian Community because those affected tend to spend less time unemployed overall. The study emphasizes that this social cost is not evenly distributed across the population.
The profile of those most affected aligns with the typical unemployed individual over 45 years old who has been out of work for more than two years, who often cannot access aid, and who tends to have medium-low education, with a higher presence among women.
The research also highlights that 41% of more than 2,850,000 unemployed people are long-term jobless (exceeding one year) and 28% have been unemployed for more than two years, roughly 700,000 workers. Additionally, about two-thirds of the unemployed do not receive any unemployment benefits, which magnifies the income shortfall they face.
Autonomies
This reframe of the unemployment phenomenon accounts for the total income loss endured by workers when their jobs end, and it yields notable results. Regional differences appear when examining unemployment rates for 2018: Extremadura, Castilla y León, Andalusia, and the Balearic Islands show the highest rates, while Navarra, Madrid, and Aragon record lower rates. Yet when the social cost of unemployment is considered, the ranking shifts: the most affected regions become Andalusia, Asturias, and the Basque Country, with the Balearic Islands showing the lowest social costs.
Industry and construction reduced unemployment in Alicante in November
The pattern there reflects a region where average unemployment duration is shorter than in other areas. By contrast, the Basque Country experiences a longer average unemployment period and greater wage loss due to lack of employment. These factors help explain why the social cost of unemployment remains high even when overall unemployment is relatively low.
In the Valencian Community, the social cost indicator dropped by 18 points, largely because the unemployed take less time to re-enter the workforce in this framework world created by the study authors. This shift suggests that faster re-employment translates into lower overall income loss and social burden for the region.