The United States today is facing a crisis of long-term
unemployment unlike anything it has seen since the 1930s. Some
40% of the unemployed have been out of work for six months or
more, which, as US Federal Reserve board chairman Ben Bernanke
noted in a recent speech, is far higher than in any other post-
second world war recession. This crisis of long-term
unemployment is having a profoundly damaging impact on the lives
of those bearing the brunt of it. We know this thanks to a
series of careful studies of the problem conducted in the depths
of the 1930s Great Depression. The most famous such study, of
the long-term unemployed in New Haven, Connecticut, was
conducted by E Wight Bakke, a graduate student and subsequently
a professor of economics at Yale University. Through participant
interviews, personal observation, time diaries, and longitudinal
studies, Bakke showed how extended spells of unemployment caused
workers' skills to deteriorate and made it difficult for them to
acquire new ones. The long-term u