[lbo-talk] Question: Source of High European/Relatively Low US Unemployment

T Fast tfast at yorku.ca
Wed Mar 9 09:27:37 PST 2005

I have a nice little comparative paper on this topic if anyone would like it I will send it to them. While it does not attempt an explanation of why rates differ it does have lots of detail about labour markets (part-time employment, demographic pressures, employment growth, etc., which helps to shed some comparative light on this subject. It also takes a look at trends in the growth / retrenchment of welfare state spending.

Travis ----- Original Message ----- From: "Doug Henwood" <dhenwood at panix.com> To: <lbo-talk at lbo-talk.org> Sent: Wednesday, March 09, 2005 9:54 AM Subject: Re: [lbo-talk] Question: Source of High European/Relatively Low US Unemployment

> Bill Bartlett wrote:
>>Getting back to the statistics though, there's a couple of things you have
>>to be cautious about. Firstly, the way most (all?) OECD countries measure
>>unemployment these days is pretty suss. The surveys ask people if they
>>have worked an hour or more in the last month (including unpaid work in a
>>family business as I recall it.) if you answer yes, you are counted as
>>employed. You are also not counted as unemployed if you haven't actually
>>looked for work. Its rigged to minimise official unemployment, in other
>>The result is that, in places with a welfare system, an anomalous
>>situation is often created where there are more people on the dole than
>>there are officially unemployed. It isn't that easy to get the dole, so
>>obviously the unemployment statistics are dodgey.
>>So you have to keep in mind when comparing unemployment statistics between
>>backward places like the US and modern welfare states, that the unemployed
>>in welfare states are actively forced to look for work to retain
>>eligibility for their welfare. So, even if they have less than a
>>snowball's chance in hell of actually getting a job, they are required to
>>go through the motions. They are very unlikely to answer "no" to the
>>question put by someone from the government who comes around asking if
>>they have looked for work in the last month.
>>So they will be counted as unemployed.
> 1) The unemployment stats I cited are computed according to the same
> definitions, so they are comparable.
> 2) To avoid problems with defining unemployment, it's better to use the
> employment/population ratio to compare labor intensity across countries.
> EPRs in most of continental Europe are low; they're higher in the
> "liberal" countries like the US and UK; and higher still in Sweden.
> Doug
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