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The difference between unemployment and non-employment

Have you heard the term “non-employment”? Wondering how it’s different from unemployment? We’ve got you covered.

You may have seen the attention-grabbing headline that the share of working-age people who aren’t in the workforce is on the rise. Surely not all these people are in graduate school, right? So what gives?

1. The non-employed may have given up on looking for work

There’s often a point at which someone who is unemployed crosses over into being non-employed. That point occurs when the person gets discouraged and stops looking for work. These frustrated workers have swelled the ranks of the non-employed, particularly in areas where economic opportunities are slim.

2. The non-employed may be disabled

Long-term disability is often a reason for someone to be non-employed, particularly if that someone is male. According to recent research, about 20% of non-working males say they are disabled. These folks are unlikely to re-enter the workforce.

Find out now: How much do I need to save for retirement?

3. The non-employed may be stay-at-home parents

A non-employed person may be spending their days on childcare. They may have left the workforce voluntarily to care for kids, or they may have planned to re-enter the workforce sometime after their children were born, have been unable to find a suitable job and stopped looking. Rising childcare costs have made the stay-at-home option more financially attractive in many families.

4. They’re not getting much in the way of unemployment insurance

The thing about unemployment benefits is that they don’t last forever. Only a fraction of the non-employed are receiving unemployment benefits. They may be receiving other forms of assistance (disability insurance, help with housing and food), but they’ve probably exhausted their unemployment benefits.

Find out now: What is life insurance?

In the personal finance space, we love to talk about “financial independence,” a.k.a saving so much money that you no longer need to work. Our visions of non-work are usually filled with travel and time spent on hobbies. There’s another type of non-working out there, though.

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Photo credit: flickr

Amelia Josephson Amelia Josephson is a writer passionate about covering financial literacy topics. Her areas of expertise include retirement and home buying. Amelia's work has appeared across the web, including on AOL, CBS News and The Simple Dollar. She holds degrees from Columbia and Oxford. Originally from Alaska, Amelia now calls Brooklyn home.
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