Students / Subjects

Handbook >> Unemployment >>

Comparing Unemployment Among Countries

Unemployment varies from country to country due to many different factors.  The recent trend in Europe has been a rise in unemployment from about 2 percent in the past to about 10 percent in some countries in the current years.  This stems from several reasons, but is mainly due to the generous benefits that European countries offer the unemployed.  In the United States, individuals without jobs are offered unemployment benefits for only a short period of time, while in Europe many countries allow individuals to collect for years.  In both Europe and the United States the demand for unskilled workers has greatly decreased as more and more skilled workers are filling the market in this technological day and age.  However, the United States has seen this effect wages rather than unemployment, but Europe has seen a dramatic increase in unemployment.  And this is not the case in every European country, as policies differ slightly from place to place, but overall unemployment has been much higher in Europe than in the United States.

Some countries also have a different measure of unemployment than the United States or other European countries.  For instance, China measures it unemployment through a registered database.  It does not take into account those who are unregistered and it does include those workers who have been laid-off which is not included in United States or European statistics.  In 2003, the registered unemployment rate in China was about 4 percent which was higher than the previous years. Japan saw record-high unemployment rates for them between 2001 and 2003 with numbers around 5 percent. Many African countries face very high numbers of unemployment rates and many Latin American countries fall between 6 and 10 percent.

The reason that there is high unemployment in much of Africa and throughout Latin America is due to under developed infrastructures and economies.  In order to solve the unemployment problems there, they must enact government policies to improve the economy.  In Europe, unemployment derives from the sheer fact that they are able to receive benefits without working.  This scenario can be described as a Moral Hazard.

Back to Unemployment


 

Copyright 2006 Experimental Economics Center. All rights reserved. Send us feedback