Briefly explain why the unemployment rate is, on average, higher in many other developed countries than...

Briefly explain why the unemployment rate is, on average, higher in many other developed countries than the United States and given examples of such higher averages. In your explanation, touch on at least 2 labor market factors.

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Expert Solution

As per International labour organisation statistics (ILOSTAT) the following data are -

2018/2019 figures	United States	France	Italy
Unemployment rate is	3.7%	9.1%	10.6%
Share of adult population with advanced education	46.4%	31.4%	16%
GDP growth rate (World Bank data)	2.9%	1.7%	0.8%
Youth labor force participation rate	55.9%	37.7%	26.1%
time related underemployment rate	0.7%	8.3%	3.6%

From the table it can be seen that two advanced countries France and Italy both have higher unemployment rate as compared to US.

Also from the figures it can be said that US has higher share of adults with advanced education compared to rest. This means that advanced education and skills improves employability and even thogh GDP growth rate is between 0.5% to 3% for all the 3 countries, the difference in employment rate could be due to efficiency of labor with which output is produced.

Further large percentage of youth is participating in labour force in US as compared to rest. This could mean that organisations and entities hire youth because they have more number of working years available.

Also rate of underemployment is less in US as compared to rest , it means labour is adequately utilized or labour is not underutilized as much as rest of the countries.

Now these are some of the labor factors , ( data for factors like trade union density, structural employment etc were not available). However certain factors work in greater percentage for some countries. Which labour factors work strongly towards high unemployment rate has to be analysed in the backdrop of the country specific environment and resource endowments.

Rahul Sunny answered 1 week ago

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