The hidden costs of unemployment typically have to do with health and with crime.
When people are employed, they tend to be in better health. This is due in part to the fact that unemployment is stressful. A person who is unemployed is constantly worried. They are not sure what will happen to them economically. This causes stress levels to rise and can reduce a person’s level of health.
When people are unemployed, they are also more likely to turn to crime. People who can’t make money any other way might start selling drugs or stealing. They might also be more likely to commit other crimes, such as domestic violence, that come more from stress and frustration than from economic motives.
The costs of treating the sick and of dealing with increased crime are some hidden costs of unemployment.