The psychology of scarcity and how it relates to unemployment

Regardless of your situation, job hunting can be a stressful and all-consuming task. These effects can compound when you’re facing all the situational, financial, social and psychological pressures accompanying unemployment that trigger scarcity.

When we talk about scarcity in society, we often tie it to financial pressures, like not having enough money to make ends meet. But we don’t realize how much scarcity affects many of our daily decisions. Scarcity manifests in our over-loaded schedules, time commitments and overly-restrictive diets. It can create distractions, stressors and mental barriers by forcing us to decide what parts of our lives are essential.


“The feeling of scarcity – of not having as much of something as you believe you need – is something more specific and agonising. To use the authors’ favourite metaphor, life under such conditions is like packing a tiny suitcase for a trip. It entails a ceaseless focus on difficult trade-offs”

– The Guardian – Review of Scarcity: Why Having Too Little Means So Much, Sendhil Mullainathan & Eldar Shafir

For example, if you’re barely completing the things on your to-do list at work and your manager assigns a new task, that creates a scarcity trap. When forced to juggle competing priorities, your “mental bandwidth” narrows, making it difficult to pay attention to anything else.

The ‘Tunnelling Effect’ and unemployment

Scarcity is a ‘tunnelling effect’ preventing us from effective decision-making. When we’re under pressure and faced with a difficult decision, it can be tough to think about anything beyond the factors contributing to the scarcity. Scarcity blocks anything outside the “tunnel,” impacting our ability to solve problems and make decisions with longer-term outcomes.

This problem is familiar among unemployed job seekers. Opportunity feels scarce when you’re searching for suitable roles and meeting rejection. Facing intense financial pressure, social stigma and anxiety, you might also avoid socializing with friends and family who seem better off, creating a scarcity of loneliness.

Tunnelling encourages you to focus on the actions and behaviours that seem urgent and immediate, like applying to jobs online. As a result, you might avoid other crucial aspects of job hunting like networking, preparing for interviews and researching companies. You might not actively avoid these tasks- you just might not see them as urgent. They require time and effort- resources in low supply.

Bandwidth and slack

The impacts of scarcity and tunnelling vary depending on the individual and situational context.

Imagine you’re packing for vacation. You have a large suitcase that comfortably fits all the clothes you want to take with you. When you get to the airport, you find out the dimensions and weight of your suitcase are incorrect- now you have to repack and take fewer clothes with you. Suddenly, you’re faced with difficult choices and experiencing the effects of scarcity. 

The lack of room in your suitcase represents a lack of “slack”- there’s no “wiggle room” to consider all the options or take a longer-term view, paraphrased from On the Psychology of Scarcity, Eldar Shafir and Sendhil Mullainathan.

This sudden change and the stress that comes with it can narrow your mental bandwidth- your mind’s ability to think about things outside the immediate problems to be solved. If you’re employed and casually searching for a job, you have more slack. You likely have more time and financial resources. When you lose the security of employment, slack decreases, and your bandwidth narrows.

Scarcity's affect on cognitive ability

We already know that scarcity negatively impacts cognitive ability, but how does this affect job seekers? Struggling with unemployment and the job search creates a ‘load’ that can damage cognitive ability. Tunnelling enhances short-term (myopic) thinking and behaviour that limits your ability to plan and consider the long-term consequences of decisions. 

At the beginning of a job search, it’s common to send out as many resumes and cover letters as possible without planning for the longer term. Due to the anxiety and loss you’re experiencing, you might not have the mental bandwidth needed to tackle more. However, if this strategy doesn’t work out and you don’t have a clear plan, it can create anxiety, a lack of motivation, and hopelessness.

How unemployed job seekers can deal with scarcity

It’s normal for unemployed job seekers to experience cognitive challenges and a lack of bandwidth. The problem is many of us are unprepared to deal with it. Increasing bandwidth and slack while reducing bandwidth consumption is the goal, but how do we get there?

Increasing bandwidth mainly relies on external factors, like more job opportunities and responses from recruiters. In the absence of these factors, it helps to focus on what you can control. You can reduce feelings of social isolation by reaching out to friends, family, and acquaintances or by making professional connections on platforms like LinkedIn.

Reducing bandwidth consumption is tricky, but we recommend being economical with your cognitive load. Start by breaking larger tasks down into smaller, bite-sized chunks. 

Rather than looking at a job search as one massive project, you can say, “Today, I’ll draft a cover letter and proofread my résumé. Tomorrow, I’ll apply to five jobs.” This makes each task more manageable and gives you spare bandwidth to use on challenging projects, tasks and decisions. It also increases your chances of making better decisions with smaller consequences. 

Slack closely connects to wellbeing.  It’s important you take the steps needed to improve your self-care and reduce your mental load. Form a simple, high-level plan for the job search that accounts for factors inside and outside the tunnel. 

Remember that you can’t address things in a day. It takes small, consistent steps to reduce slack, so keep breaking down these goals into manageable chunks. 

Final thoughts

Scarcity is a common issue that affects us in many ways.  The scarcity traps we face when unemployed and looking for work can seem like insurmountable obstacles, but they don’t have to. Connecting with a community and reducing your cognitive load are just a few ways to increase slack and bandwidth.  

A job hunt is a huge undertaking, but when we break it down into tiny parts, it becomes manageable. The Buoyancy app helps you break things down to ease your mental load and make looking for a job easier.

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3 Responses

  1. This is a great read. Glad I found it. Really speaks to the challenges of looking for work (and other things). Not enough is said about the broad range of pressures that can arise from unemployment, and the people in your circle that are impacted.

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