The relationship of human capital formation variables and unemployment status was evaluated by interviewing 1,493 families (1 adult member responded per household) in 1975 in a 5-county area of rural, Appalachian Ohio. The primary research objective was to determine the factors predictive of length of unemployment using the "investment" variables of age, education, occupational background, number of children living at home, length of residence in the region, and formal group membership. Approximately 20% of the respondents indicated that the primary family income earner had been unemployed for a period of time during the preceding year; 30 respondents reported unemployment time periods greater than 12 months. Findings revealed that the "investment" variables selected for investigation were basically insignificant in the explanation of length of unemployment and unemployment status (employed vs. unemployed) among residents. Household heads who were unemployed for extended periods of time could not be distinguished from heads of households who had been unemployed for shorter periods of time. The discriminant analysis findings also demonstrated that the "investment" variables were unable to discriminate between unemployed and employed groups. Thus, the major conclusion of the study was that the theoretical perspective offered to explain unemployment within the study areas must be repudiated. (BRR)