unemployment

Unemployment occurs when a person is able and willing to work but currently is without work.[2] The prevalence of unemployment is usually measured using the unemployment rate, which is defined as the percentage of those in the labor force who are unemployed. The unemployment rate is used in economic studies and indices including the United States' Conference Board's Index of Leading Indicators a macroeconomic measure of the state of the economy.

The causes of unemployment are disputed. Keynesian economics emphasizes unemployment resulting from insufficient effective demand for goods and services in the economy (cyclical unemployment). Others point to structural problems and inefficiencies inherent in labour markets; structural unemployment involves mismatches between demand and supply of laborers with the necessary skillset, sometimes induced by technologies or globalisation. Classical or neoclassical economics tends to reject these explanations, and focuses more on rigidities imposed on the labor market from the outside, such as unionization, minimum wage laws, taxes, and other regulations that may discourage the hiring of workers (classical unemployment). Yet others see unemployment as largely due to voluntary choices based on how much someone values their own work and how that compares to current wage rates and the time it takes to find a new job (frictional unemployment). Behavioral economics highlights phenomena such as sticky wages and efficiency wages which may lead to unemployment.

There are also different ways national statistical agencies measure unemployment. These differences may limit the validity of international comparisons of unemployment data." [3] To some degree these differences remain despite national statistical agencies increasingly adopting the definition of unemployment by the International Labor Organization.[4] To facilitate international comparisons, some organizations, such as the OECD, Eurostat, and International Labor Comparisons Program, adjust data on unemployment for comparability across countries.

Different countries experience different levels of unemployment; traditionally, the United States tends to experience lower unemployment levels than countries in the European Union,[5] although there is some variation there, with countries like the UK and Denmark outperforming Italy and France and it also changes over time (e.g. the Great Depression) throughout economic cycles.