Scarcity: The use and abuse of psychology to reduce unemployment

The idea that psychology (rather than shortages of jobs or skills) plays a role in unemployment is controversial. Yet employment service providers report that motivation makes a difference. A decade ago, an Australian Government study argued that the attitudes of unemployed people influenced their job prospects. But it left many questions unanswered: what lay behind those attitudes? Where they permanent or a fleeting response to current circumstances? A new book by American economist and psychologist team Mullainathan and Shafir gives us new insights into how people respond to poverty. It reveals how ‘scarcity’ shapes people’s lives and behaviour. This has implications for the way governments treat unemployed people.

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