Severance Insurance

Geeeez, you'd think I wouldn't be so inept, but believe it or not and thanks to some spade work by a very good friend (thank you Matt), I've finally learned how to show you the graphs that are generated by the Bureau of Labor Statistics for monthly unemployment duration statistics for the period 1948 to 2007. That's almost 59 years of monthly data. I'd say that is representative of reality. The graphs below (in order) show that history for:

1. The percentage of unemployed workers who go back to work within five weeks

2. The percentage of unemployed workers who go back to work within 5 to 14 weeks

3. The percentage of unemployed workers who go back to work within 15 to 26 weeks

4. The percentage of unemployed workers who go back to work in more than 27 weeks

What's really interesting to me is comparing this data with the average unemployment duration as reported by the BLS. It clearly demonstrates the arbitrage that exists between average duration and the percentage of unemployed workers who get re-employed within the period defined by the duration data. No rocket science invoilved here. Insurers can clearly see that the odds are in their favor.

I'll dial into the average unemployment duration data in my next blog.

willy