What is the bagel effect?

The bagel effect is a concept in economics that describes the phenomenon where workers face difficulties in finding employment after a period of unemployment, despite possessing the necessary skills and qualifications. This is because employers may see the gap in employment as a red flag, leading to stigmatization and discrimination against these individuals.

The term "bagel effect" was first coined by economist Alan B. Krueger in a study that analyzed the hiring patterns of employers towards job applicants with varying lengths of unemployment. The study found that individuals who had been unemployed for longer periods were less likely to receive job offers, even if they were equally qualified as those who had been unemployed for shorter periods.

The bagel effect highlights the importance of addressing structural barriers and biases in hiring practices, as well as the need for policies that support reintegration of long-term unemployed individuals into the workforce. This can include initiatives such as training programs, job placement assistance, and subsidized employment opportunities.