The unemployed should hold out for better job, study says

After the recession, millions of unemployed workers faced a wrenching dilemma: hold out for a job as good as the one they left, or take a lower-level position, often outside their field.

A new study surprisingly concludes it's better to wait, at least for mid-level workers. It found employers seeking office workers were more likely to call unemployed applicants with relevant experience than those with similar backgrounds who recently took a lower-level position.

"We do seem to find that employers don't like blemishes," such as low-level jobs, on resumes, says Till von Wachter, the study's co-author and a labor economics professor at UCLA.

Von Wachter says the findings may not apply to many workers at higher levels, whose resumes employers often read more carefully.

The study, by Von Wachter, and economists Henry Farber of Princeton and Dan Silverman of Arizona State University, will be published Monday by the National Bureau of Economic Research.

During and after the 2007-09 economic downturn -- the worst since the Great Depression -- many of the 8.7 million Americans who had been laid off accepted offers in their field, but the jobs were several levels below their previous rank. Many of the long-term unemployed took whatever jobs they could find, including low-level posts outside their industries.

In 2013 and 2014, the study authors sent out nearly 8,000 fake resumes from female applicants for about 2,400 openings for jobs such as administrative or executive assistants and office associates in eight cities, including Chicago, Dallas, and Sacramento. The fictitious candidates were all unemployed college graduates with relevant experience, but some had recently taken a low-level job at a chain restaurant, big box retail store or grocery store.

Nearly 10% of the jobless applicants were called by the employers, compared to 8.5% of those who had taken a stopgap job. The study concluded that "taking a low-level interim job significantly reduces the likelihood of receiving a call back."

Von Wachter says employers who rejected those applicants may have viewed the interim job as a negative signal or done a cursory, possibly even automated, screening of their resumes.

Some staffing experts still say having a job, any job, beats the alternative. "I think the employer... says they're continuing to work and continuing to develop their skills," says John Reed, an executive at staffing firm Robert Half.

Paul Wolfe, head of human resources for Indeed, the online job posting board, says he looks only at whether applicants for jobs at his firm have relevant experience. But he concedes that when the company combs through many resumes in search of a candidate with very specific experience, those with a current lower-level job "could get filtered out."

One possible remedy is to leave the interim job off the resume, the study notes, though many human resource professionals say that's not ethical.

Anne Colucci, 52, of White Plains, N.Y., a former chief financial officer for a credit union, recently took a job as an internal auditor at a bigger credit union at a third of the pay, partly to support her family and avoid gaps in her resume. But she says it caused another credit union to rule her out for a CEO job.

"I probably should not have gone back to work," she says.

Paul Davidson on Twitter: @PDavidsonusat.