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A government unemployment office with job listings, West Berlin, West Germany, 1982

Internationally, some nations' unemployment rates are sometimes muted or appear less severe because of the number of self-employed individuals working in agriculture.[65] Small independent farmers are often considered self-employed and so cannot be unemployed. That can impact non-industrialized economies, such as the United States and Europe in the early 19th century, since overall unemployment was approximately 3% because so many individuals were self-employed, independent farmers; however, non-agricultural unemployment was as high as 80%.[65]

Many economies industrialize and so experience increasing numbers of non-agricultural workers. For example, the United States' non-agricultural labour force increased from 20% in 1800 to 50% in 1850 and 97% in 2000.[65] The shift away from self-employment increases the percentage of the population that is included in unemployment rates. When unemployment rates between countries or time periods are compared, it is best to consider differences in their levels of industrialization and self-employment.

Additionally, the measures of employment and unemployment may be "too high." In some countries, the availability of unemployment benefits can inflate statistics by giving an incentive to register as unemployed. People who do not seek work may choose to declare themselves unemployed to get benefits; people with undeclared paid occupations may try to get unemployment benefits in addition to the money that they earn from their work.[71]

However, in the United States, Canada, Mexico, Australia, Japan, and the European Union, unemployment is measured using a sample survey (akin to a Gallup poll).[34] According to the BLS, a number of Eastern European nations have instituted labour force surveys as well. The sample survey has its own problems because the total number of workers in the economy is calcu

The last people are "involuntary part-time" workers, those who are underemployed, such as a computer programmer who is working in a retail store until he can find a permanent job, involuntary stay-at-home mothers who would prefer to work, and graduate and professional school students who are unable to find worthwhile jobs after they graduated with their bachelor's degrees.

Internationally, some nations' unemployment rates are sometimes muted or appear less severe because of the number of self-employed individuals working in agriculture.[65] Small independent farmers are often considered self-employed and so cannot be unemployed. That can impact non-industrialized economies, such as the United States and Europe in the early 19th century, since overall unemployment was approximately 3% because so many individuals were self-employed, independent farmers; however, non-agricultural unemployment was as high as 80%.[65]

Many economies industrialize and so experience increasing numbers of non-agricultural workers. For example, the United States' non-agricultural labour force increased from 20% in 1800 to 50% in 1850 and 97% in 2000.[65] The shift away from self-employment increases the percentage of the population that is included in unemployment rates. When unemployment rates between countries or time periods are compared, it is best to consider differences in their levels of industrialization and self-employment.

Additionally, the measures of employment and unemployment may be "too high." In some countries, the availability of unemployment benefits can inflate statistics by giving an incentive to register as unemployed. People who do not seek work may choose to declare themselves unemployed to get benefits; people with undeclared paid occupations may try to get unemployment benefits in addition to the money that they earn from their work.[71]

However, in the United States, Canada, Mexico, Australia, Japan, and the European Union, unemployment is measured using a sample survey (akin to a [65] The shift away from self-employment increases the percentage of the population that is included in unemployment rates. When unemployment rates between countries or time periods are compared, it is best to consider differences in their levels of industrialization and self-employment.

Additionally, the measures of employment and unemployment may be "too high." In some countries, the availability of unemployment benefits can inflate statistics by giving an incentive to register as unemployed. People who do not seek work may choose to declare themselves unemployed to get benefits; people with undeclared paid occupations may try to get unemployment benefits in addition to the money that they earn from their work.[71]

However, in the United States, Canada, Mexico, Australia, Japan, and the European Union, unemployment is measured using a sample survey (akin to a Gallup poll).[34] According to the BLS, a number of Eastern European nations have instituted labour force surveys as well. The sample survey has its own problems because the total number of workers in the economy is calculated based on a sample, rather than a census.

It is possible to be neither employed nor unemployed by ILO definitions by being outside of the "labour force."[36] Such people have no job and are not looking for one. Many of them go to school or are retired. Family responsibilities keep others out of the labour force. Still others have a physical or mental disability that prevents them from participating in the labour force. Some people simply elect not to work and prefer to be dependent on others for sustenance.

Typically, employment and the labour force include only work that is done for monetary gain. Hence, a homemaker is neither part of the labour force nor unemployed. Also, full-time students and prisoners are considered to be neither part of the labour force nor unemployed.[70] The number of prisoners can be important. In 1999, economists Lawrence F. Katz and Alan B. Krueger estimated that increased incarceration lowered measured unemployment in the United States by 0.17% between 1985 and the late 1990s.[70]

In particular, as of 2005, roughly 0.7% of the US population is incarcerated (1.5% of the available working population). Additionally, children, the elderly, and some individuals with disabilities are typically not counted as part of the labour force and so are not included in the unemployment statistics. However, some elderly and many disabled individuals are active in the labour market.

In the early stages of an economic boom, unemployment often rises.[16] That is because people join the labour market (give up studying, start a job hunt, etc.) as a result of the improving job market, but until they have actually found a position, they are counted as unemployed. Similarly, during a recession, the increase in the unemployment rate is moderated by people leaving the labour force or being otherwise discounted from the labour force, such as with the self-employed.

For the fourth quarter of 2004, according to OECD (Employment Outlook 2005 ISBN 92-64-01045-9), normalized unemployment for men aged 25 to 54 was 4.6% in the US and 7.4% in France. At the same time and for the same population, the employment rate (number of workers divided by population) was 86.3% in the US and 86.7% in France. That example shows that the unemployment rate was 60% higher in France than in the US, but more people in that demographic were working in France than in the US, which is counterintuitive if it is expected that the unemployment rate reflects the health of the labour market.[72][73]

Those deficiencies make many labour market economists prefer to look at a range of economic statistics such as labour market participation rate, the percentage of people between 15 and 64 who are currently employed or searching for employment, the total number of full-time jobs in an economy, the number of people seeking work as a raw number and not a percentage, and the total number of person-hours worked in a month compared to the total number of person-hours people would like to work. In particular, the National Bureau of Economic Research does not use the unemployment rate but prefers various employment rates to date recessions.[74]

The labor force participation rate is the ratio between the labor force and the overall size of their cohort (national population of the same age range). In the West, during the later half of the 20th century, the labor force participation rate increased significantly because of an increase in the number of women entering the workplace.

In the United States, there have been four significant stages of women's participation in the labour force: increases in the 20th century and decreases in the 21st century. Male labor force participation decreased from 1953 to 2013. Since October 2013, men have been increasingly joining the labour force.

From the late 19th century to the 1920s, very few women worked outside the home. They were young single women who typically withdrew from the labor force at marriage unless family needed two incomes. Such women worked primarily in the textile manufacturing industry or as domestic workers. That profession empowered women and allowed them to earn a living wage. At times, they were a financial help to their families.

Between 1930 and 1950, female labor force participation increased primarily because of the increased demand for office workers, women's participation in the high school movement, and electrification, which reduced the time that was spent on household chores. From the 1950s to the early 1970s, most women were secondary earners working mainly as secretaries, teachers, nurses, and librarians (pink-collar jobs).

In the United States, there have been four significant stages of women's participation in the labour force: increases in the 20th century and decreases in the 21st century. Male labor force participation decreased from 1953 to 2013. Since October 2013, men have been increasingly joining the labour force.

From the late 19th century to the 1920s, very few women worked outside the home. They were young single women who typically withdrew from the labor force at marriage unless family needed two incomes. Such women worked primarily in the textile manufacturing industry or as domestic workers. That profession empowered women and allowed them to earn a living wage. At times, they were a financial help to their families.

Between 1930 and 1950, female labor force participation increased primarily because of the increased demand for office workers, women's participation in the high school movement, and electrification, which reduced the time that was spent on household chores. From the 1950s to the early 1970s, most women were secondary earners working mainly as secretaries, teachers, nurses, and librarians (pink-collar jobs).

From the mid-1970s to the late 1990s, there was a period of revolution of women in the labor force brought on by various factors, many of which arose from the second-wave feminism movement. Women more accurately planned for their future in the work force by investing in more applicable majors in college that prepared them to enter and compete in the labor market. In the United States, the female labor force participation rate rose from approximately 33% in 1948 to a peak of 60.3% in 2000. As of April 2015, the female labor force participation is at 56.6%, the male labor force participation rate is at 69.4%, and the total is 62.8%.[75]

A common theory in modern economics claims that the rise of women participating in the US labor force in the 1950s to the 1990s was caused by the introduction of a new contraceptive technology, birth control pills, as well as the adjustment of age of majority laws. The use of birth control gave women the flexibility of opting to invest and to advance their career while they maintained a relationship. By having control over the timing of their fertility, they were not running a risk of thwarting their career choices. However, only 40% of the population actually used the birth control pill.

That implies that other factors may have contributed to women choosing to invest in advancing their careers. One factor may be that an increasing number of men delayed the age of marriage, which allowed women to marry later in life without them worrying about the quality of older men. Other factors include the changing nature of work, with machines replacing physical labor, thus eliminating many traditional male occupations, and the rise of the service sector in which many jobs are gender neutral.

Another factor that may have contributed to the trend was the Equal Pay Act of 1963, which aimed at abolishing wage disparity based on sex. Such legislation diminished sexual discrimination and encouraged more women to enter the labor market by receiving fair remuneration to help raising families and children.

At the turn of the 21st century, the labor force participation began to reverse its long period of increase. Reasons for the change include a rising share of older workers, an increase in school enrollment rates among young workers, and a decrease in female labor force participation.[76]

The labor force participation rate can decrease when the rate of growth of the population outweighs that of the employed and the unemployed together. The labor force participation rate is a key component in long-term economic growth, almost as important as productivity.

A historic shift began around the end of the Great Recession as women began leaving the labor force in the United States and other developed countries. The female labor force participation rate in the United States has steadily decreased since 2009, and as of April 2015, the female labor force participation rate has gone back down to 1988 levels of 56.6%.[75]

Participation rates are defined as follows:

The labor force participation rate explains how an increase in the unemployment rate can occur simultaneously with an increase in employment. If a large number of new workers enter the labor force but only a small fraction become employed, then the increase in the number of unemployed workers can outpace the growth in employment.[77]

Unemployment ratio

The unemployment ratio calculates the share of unemployed for the whole population. Particularly, many young people between 15 and 24

The unemployment ratio calculates the share of unemployed for the whole population. Particularly, many young people between 15 and 24 are studying full-time and so are neither working nor looking for a job. That means that they are not part of the labor force, which is used as the denominator when the unemployment rate is calculated.[78] The youth unemployment ratios in the European Union range from 5.2 (Austria) to 20.6 percent (Spain). They are considerably lower than the standard youth unemployment rates, ranging from 7.9 (Germany) to 57.9 percent (Greece).[79]

Effects

High and the persistent unempl

High and the persistent unemployment, in which economic inequality increases, has a negative effect on subsequent long-run economic growth. Unemployment can harm growth because it is a waste of resources; generates redistributive pressures and subsequent distortions; drives people to poverty; constrains liquidity limiting labor mobility; and erodes self-esteem promoting social dislocation, unrest, and conflict.[80] The 2013 winner of the Nobel Prize in Economics, Robert J. Shiller, said that rising inequality in the United States and elsewhere is the most important problem.[81]

Costs

Unemployed individuals are unable to earn money to meet financial obligations. Failure to pay mortgage payments or to pay rent may lead to homelessness through foreclosure or eviction.[82] Across the United States the growing ranks of people made homeless in the foreclosure crisis are generating tent cities.[83]

Unemployment increases susceptibility to cardiovascular disease, somatization, anxiety disorders, depression, and suicide. In addition, unemployed people have higher rates of medication use, poor diet, physician visits, tobacco smoking, alcoholic beverage consumption, drug use, and lower rates of exercise.[84] According to a study published in Social Indicator Research, even those who tend to be optimistic find it difficult to look on the bright side of things when unemployed. Using interviews and data from German participants aged 16 to 94, including individuals coping with the stresses of real life and not just a volunteering student population, the researchers determined that even optimists struggled with being unemployed.[85]

In 1979, cardiovascular disease, somatization, anxiety disorders, depression, and suicide. In addition, unemployed people have higher rates of medication use, poor diet, physician visits, tobacco smoking, alcoholic beverage consumption, drug use, and lower rates of exercise.[84] According to a study published in Social Indicator Research, even those who tend to be optimistic find it difficult to look on the bright side of things when unemployed. Using interviews and data from German participants aged 16 to 94, including individuals coping with the stresses of real life and not just a volunteering student population, the researchers determined that even optimists struggled with being unemployed.[85]

In 1979, M. Harvey Brenner found that for every 10% increase in the number of unemployed, there is an increase of 1.2% in total mortality, a 1.7% increase in cardiovascular disease, 1.3% more cirrhosis cases, 1.7% more suicides, 4.0% more arrests, and 0.8% more assaults reported to the police.[86][87]

A study by Christopher Ruhm in 2000 on the effect of recessions on health found that several measures of health actually improve during recessions.[88] As for the impact of an economic downturn on crime, during the Great Depression, the crime rate did not decrease. The unemployed in the US often use welfare programs such as food stamps or accumulating debt because unemployment insurance in the US generally does not replace most of the income that was received on the job, and one cannot receive such aid indefinitely.

Not everyone suffers equally from unemployment. In a prospective study of 9,570 individuals over four years, highly-conscientious people suffered more than twice as much if they became unemployed.[89] The authors suggested that may because of conscientious people making different attributions about why they became unemployed or through experiencing stronger reactions following failure. There is also the possibility of reverse causality from poor health to unemployment.[90]

Some researchers hold that many of the low-income jobs are not really a better option than unemployment with a welfare state, with its unemployment insurance benefits. However, since it is difficult or impossible to get unemployment insurance benefits without having worked in the past, those jobs and unemployment are more complementary than they are substitutes. (They are often held short-term, either by students or by those trying to gain experience; turnover in most low-paying jobs is high.)

Another cost for the unemployed is that the combination of unemployment, lack of financial resources, and social responsibilities may push unemployed workers to take jobs that do not fit their skills or allow them to use their talents. Unemployment can cause underemployment, and fear of job loss can spur psychological anxiety. As well as anxiety, it can cause depression, lack of confidence, and huge amounts of stress, which is increased when the unemployed are faced with health issues, poverty, and lack of relational support.[91]

Another personal cost of unemployment is its impact on relationships. A 2008 study from Covizzi, which examined the relationship between unemployment and divorce, found that the rate of divorce is greater for couples when one partner is unemployed.[92] However, a more recent study has found that some couples often stick together in "unhappy" or "unhealthy" marriages when they are unemployed to buffer financial costs.[93] A 2014 study by Van der Meer found that the stigma that comes from being unemployed affects personal well-being, especially for men, who often feel as though their masculine identities are threatened by unemployment.[94]

Unemployment can also bring personal costs in relation to gender. One study found that women are more likely to experience unemployment than men and that they are less likely to move from temporary positions to permanent positions.[95] Another study on gender and unemployment found that men, however, are more likely to experience greater stress, depression, and adverse effects from unemployment, largely stemming from the perceived threat to their role as breadwinner.[96] The study found that men expect themselves to be viewed as "less manly" after a job loss than they actually are and so they engage in compensating behaviors, such as financial risk-taking and increased assertiveness. Unemployment has been linked to extremely adverse effects on men's mental health.[97] Professor Ian Hickie of the University of Sydney said that evidence showed that men have more restricted social networks than women and that men have are heavily work-based. Therefore, the loss of a job for men means the loss of a whole set of social connections as well. That loss can then lead to men becoming socially isolated very quickly.[98]

Costs of unemployment also vary depending on age. The young and the old are the two largest age groups currently experiencing unemployment.[99] A 2007 study from Jacob and Kleinert found that young people (ages 18 to 24) who have fewer resources and limited work experiences are more likely to be unemployed.[100] Other researchers have found that today's high school seniors place a lower value on work than those in the past, which is likely because they recognize the limited availability of jobs.[101] At the other end of the age spectrum, studies have found that older individuals have more barriers than younger workers to employment, require stronger social networks to acquire work, and are also less likely to move from temporary to permanent positions.[95][99] Additionally, some older people see age discrimination as the reason for them not getting hired.[102]

An economy with high unemployment is not using all of the resources, specifically labour, available to it. Since it is operating below its production possibility frontier, it could have higher output if all of the workforce were usefully employed. However, there is a tradeoff between economic efficiency and unemployment: if all frictionally unemployed accepted the first job that they were offered, they would be likely to be operating at below their skill level, reducing the economy's efficiency.[103]

During a long period of unemployment, workers can lose their skills, causing a loss of human capital. Being unemployed can also reduce the life expectancy of workers by about seven years.[8]

High unemployment can encourage xenophobia and protectionism since workers fear that foreigners are stealing their jobs.[104] Efforts to preserve existing jobs of domestic and native workers include legal barriers against "outsiders" who want jobs, obstacles to immigration, and/or tariffs and similar trade barriers against foreign competitors.

High unemployment can also cause social problems such as crime. If people have less disposable income than before, it is very likely that crime levels within the economy will increase.

A 2015 study published in