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19.4: Causes of Unemployment around the World

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Learning Objectives

Explain the nature and causes of unemployment
Analyze the natural rate of unemployment and the factors that affect it
Identify how undeveloped labor markets can result in the same hardships as unemployment

We can categorize the causes of unemployment in the world's high-income countries in two ways: either cyclical unemployment caused by the economy when in a recession, or the natural rate of unemployment caused by factors in labor markets, such as government regulations regarding hiring and starting businesses.

Unemployment from a Recession

For unemployment caused by a recession, the Keynesian economic model points out that both monetary and fiscal policy tools are available. The monetary policy prescription for dealing with recession is straightforward: run an expansionary monetary policy to increase the quantity of money and loans, drive down interest rates, and increase aggregate demand . In a recession , there is usually relatively little danger of inflation taking off, and so even a central bank, with fighting inflation as its top priority, can usually justify some reduction in interest rates.

With regard to fiscal policy , the automatic stabilizers that we discussed in Government Budgets and Fiscal Policy should be allowed to work, even if this means larger budget deficits in times of recession. There is less agreement over whether, in addition to automatic stabilizers, governments in a recession should try to adopt discretionary fiscal policy of additional tax cuts or spending increases. In the case of the Great Recession, the case for this kind of extra-aggressive expansionary fiscal policy is stronger, but for a smaller recession, given the time lags of implementing fiscal policy, countries should use discretionary fiscal policy with caution.

However, the aftermath of the Recession emphasizes that expansionary fiscal and monetary policies do not turn off a recession like flipping a switch turns off a lamp. Even after a recession is officially over, and positive growth has returned, it can take some months—or even a couple of years—before private-sector firms believe the economic climate is healthy enough that they can expand their workforce.

The Natural Rate of Unemployment

Unemployment rates in European nations have typically been higher than in the United States. In 2020, before the start of the COVID-19 pandemic , the U.S. unemployment rate was 3.5%, compared with 8.5% in France, 10% in Italy, and 7.1% in Sweden. We can attribute the pattern of generally higher unemployment rates in Europe, which dates back to the 1970s, to the fact that European economies have a higher natural rate of unemployment because they have a greater number of rules and restrictions that discourage firms from hiring and unemployed workers from taking jobs.

Addressing the natural rate of unemployment is straightforward in theory but difficult in practice. Government can play a useful role in providing unemployment and welfare payments, for example, by passing rules about where and when businesses can operate, and assuring that the workplace is safe. However, these well-intentioned laws can, in some cases, become so intrusive that businesses decide to place limits on their hiring.

For example, a law that imposes large costs on a business that tries to fire or lay off workers will mean that businesses try to avoid hiring in the first place, as is the case in France. According to Business Week , “France has 2.4 times as many companies with 49 employees as with 50 ... according to the French labor code, once a company has at least 50 employees inside France, management must create three worker councils, introduce profit sharing, and submit restructuring plans to the councils if the company decides to fire workers for economic reasons.” This labor law essentially limits employment (or raises the natural rate of unemployment).

Undeveloped and Transitioning Labor Markets

Low-income and middle-income countries face employment issues that go beyond unemployment as it is understood in the high-income economies. A substantial number of workers in these economies provide many of their own needs by farming, fishing, or hunting. They barter and trade with others and may take a succession of short-term or one-day jobs, sometimes receiving pay with food or shelter, sometimes with money. They are not “unemployed” in the sense that we use the term in the United States and Europe, but neither are they employed in a regular wage-paying job.

The starting point of economic activity, as we discussed in Welcome to Economics!, is the division of labor, in which workers specialize in certain tasks and trade the fruits of their labor with others. Workers who are not connected to a labor market are often unable to specialize very much. Because these workers are not “officially” employed, they are often not eligible for social benefits like unemployment insurance or old-age payments—if such payments are even available in their country. Helping these workers to become more connected to the labor market and the economy is an important policy goal. Recent research by development economists suggests that one of the key factors in raising people in low-income countries out of the worst kind of poverty is whether they can make a connection to a somewhat regular wage-paying job.

Economist Sir W. Arthur Lewis examined such transitions of labor and the impact on economic development. His core theoretical framework—the dual sector economy—proposes that, essentially, the marginal product of low-skilled workers is greater in the manufacturing sector than it is in the agricultural sector. That’s because most agricultural societies are both mature and have fixed inputs (land, water, and related resources); the marginal product of additional farmers on that land is nearly zero, creating what Lewis termed “surplus workers.” Early-stage manufacturing sectors, however, have great need for low-skilled workers, and can make better use (greater marginal product) of them. Their wages will remain low, but as stated above, the wages are more likely to be consistent and therefore move toward a large-scale transition of the labor force.

We have seen this practically in many nations experiencing a shift in labor, particularly in China. In many regions, it is marked by a level of migration—people leaving rural areas for cities or manufacturing zones. At some point, nations achieve what economists call the Lewis turning point, in which the surplus agricultural labor is fully absorbed into the manufacturing sector. Typically, when this occurs, wages in both agricultural and manufacturing sectors begin to rise in a sustainable manner. Despite massive transformation in the Chinese economy over the past decades, economists dispute whether China has actually reached the Lewis turning point.

Economic transition is not without its downsides. Many manufacturing-focused countries still rely heavily on their agricultural sectors for their own sustenance and as a core part of international trade. As the agricultural sector faces competition from manufacturing, and as people physically leave rural areas, farming economies can suffer downturns and unpredictability. Finally, countries or individual farmers seeking to make up for their missing labor may encourage migration and/or immigration that may cause political or financial conflict.

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Chapter 32. Macroeconomic Policy Around the World

32.3 Causes of Unemployment around the World

Learning objectives.

By the end of this section, you will be able to:

Explain the nature and causes of unemployment
Analyze the natural rate of unemployment and the factors that affect it
Identify how undeveloped labor markets can result in the same hardships as unemployment

The causes of unemployment in high-income countries of the world can be categorized in two ways: either cyclical unemployment caused by the economy being in a recession, or the natural rate of unemployment caused by factors in labor markets, such as government regulations regarding hiring and starting businesses.

Unemployment from a Recession

With regard to fiscal policy , the automatic stabilizers discussed in Government Budgets and Fiscal Policy should be allowed to work, even if this means larger budget deficits in times of recession. There is less agreement over whether, in addition to automatic stabilizers, governments in a recession should try to adopt discretionary fiscal policy of additional tax cuts or spending increases. In the case of the Great Recession, the case for this kind of extra-aggressive expansionary fiscal policy is stronger, but for a smaller recession, given the time lags of implementing fiscal policy, discretionary fiscal policy should be used with caution.

The Natural Rate of Unemployment

Unemployment rates in the nations of Europe have typically been higher than in the United States. In 2006, before the start of the Great Recession , the U.S. unemployment rate was 4.6%, compared with 9% in France, 10.4% in Germany, and 7.1% in Sweden. The pattern of generally higher unemployment rates in Europe, which dates back to the 1970s, is typically attributed to the fact that European economies have a higher natural rate of unemployment because they have a greater number of rules and restrictions that discourage firms from hiring and unemployed workers from taking jobs.

Addressing the natural rate of unemployment is straightforward in theory but difficult in practice. Government can play a useful role in providing unemployment and welfare payments, passing rules about where and when businesses can operate, assuring that the workplace is safe, and so on. But these well-intentioned laws can, in some cases, become so intrusive that businesses decide to place limits on their hiring.

For example, a law that imposes large costs on a business that tries to fire or lay off workers will mean that businesses try to avoid hiring in the first place, as is the case in France. According to Business Week , “France has 2.4 times as many companies with 49 employees as with 50 … according to the French labor code, once a company has at least 50 employees inside France, management must create three worker councils, introduce profit sharing, and submit restructuring plans to the councils if the company decides to fire workers for economic reasons.” This labor law essentially limits employment (or raises the natural rate of unemployment).

Undeveloped Labor Markets

Low-income and middle-income countries face employment issues that go beyond unemployment as it is understood in the high-income economies. A substantial number of workers in these economies provide many of their own needs by farming, fishing, or hunting. They barter and trade with others and may take a succession of short-term or one-day jobs, sometimes being paid with food or shelter, sometimes with money. They are not “unemployed” in the sense that the term is used in the United States and Europe, but neither are they employed in a regular wage-paying job.

The starting point of economic activity, as discussed in Welcome to Economics! , is the division of labor, in which workers specialize in certain tasks and trade the fruits of their labor with others. Workers who are not connected to a labor market are often unable to specialize very much. Because these workers are not “officially” employed, they are often not eligible for social benefits like unemployment insurance or old-age payments—if such payments are even available in their country. Helping these workers to become more connected to the labor market and the economy is an important policy goal. Indeed, recent research by development economists suggests that one of the key factors in raising people in low-income countries out of the worst kind of poverty is whether they can make a connection to a somewhat regular wage-paying job.

Key Concepts and Summary

Cyclical unemployment can be addressed by expansionary fiscal and monetary policy. The natural rate of unemployment can be harder to deal with, because it involves thinking carefully about the tradeoffs involved in laws that affect employment and hiring. Unemployment is understood differently in high-income countries compared to low- and middle-income countries. People in these countries are not “unemployed” in the sense that term is used in the United States and Europe, but neither are they employed in a regular wage-paying job. While some may have regular wage-paying jobs, others are part of a barter economy.

Self-Check Questions

What are the different policy tools for dealing with cyclical unemployment?
Explain how the natural rate of unemployment may be higher in low-income countries.

Review Questions

What are the two types of unemployment problems?
In low-income countries, does it make sense to argue that most of the people without long-term jobs are unemployed?

Critical Thinking Question

Is it possible to protect workers from being fired without distorting the labor market?
Explain what will happen in a nation that tries to solve a structural unemployment problem using expansionary monetary and fiscal policy. Draw one AD/AS diagram, based on the Keynesian model, for what the nation hopes will happen. Then draw a second AD/AS diagram, based on the neoclassical model, for what is more likely to happen.

Retrieve the unemployment data from The World Bank database ( http://databank.worldbank.org/data/home.aspx ) for India, Spain, and South Africa for 2008–2012. Prepare a chart that compares India, Spain, and South Africa based on the data. Describe the key differences between the countries. Rank these countries as high-, medium-, and low-income countries. Explain what is surprising or expected about this data. How were these countries impacted by the Great Recession?

Viscusi, Gregory, and Mark Deen. “Why France Has So Many 49-Employee Companies.” Business Week . Last modified May 3, 2012. http://www.businessweek.com/articles/2012-05-03/why-france-has-so-many-49-employee-companies.

Answers to Self-Check Questions

If there is a recession and unemployment increases, we can call on an expansionary fiscal policy (lower taxes or increased government spending) or an expansionary monetary policy (increase the money supply and lower interest rates). Both policies stimulate output and decrease unemployment.
Aside from a high natural rate of unemployment due to government regulations, subsistence households may be counted as not working.

42.4 – Causes of Unemployment around the World

Learning Objectives

By the end of this section, you will be able to:

Explain the nature and causes of unemployment
Analyze the natural rate of unemployment and the factors that affect it
Identify how undeveloped labor markets can result in the same hardships as unemployment

We can categorize the causes of unemployment in the world’s high-income countries in two ways: either cyclical unemployment caused by the economy when in a recession, or the natural rate of unemployment caused by factors in labor markets, such as government regulations regarding hiring and starting businesses.

Unemployment from a Recession

The Natural Rate of Unemployment

Unemployment rates in European nations have typically been higher than in the United States. In 2006, before the start of the Great Recession , the U.S. unemployment rate was 4.6%, compared with 9% in France, 10.4% in Germany, and 7.1% in Sweden. We can attribute the pattern of generally higher unemployment rates in Europe, which dates back to the 1970s, to the fact that European economies have a higher natural rate of unemployment because they have a greater number of rules and restrictions that discourage firms from hiring and unemployed workers from taking jobs.

For example, a law that imposes large costs on a business that tries to fire or lay off workers will mean that businesses try to avoid hiring in the first place, as is the case in France. According to Business Week , “France has 2.4 times as many companies with 49 employees as with 50 … according to the French labor code, once a company has at least 50 employees inside France, management must create three worker councils, introduce profit sharing, and submit restructuring plans to the councils if the company decides to fire workers for economic reasons.” This labor law essentially limits employment (or raises the natural rate of unemployment).

Undeveloped Labor Markets

The starting point of economic activity, as we discussed in Welcome to Economics! , is the division of labor, in which workers specialize in certain tasks and trade the fruits of their labor with others. Workers who are not connected to a labor market are often unable to specialize very much. Because these workers are not “officially” employed, they are often not eligible for social benefits like unemployment insurance or old-age payments—if such payments are even available in their country. Helping these workers to become more connected to the labor market and the economy is an important policy goal. Recent research by development economists suggests that one of the key factors in raising people in low-income countries out of the worst kind of poverty is whether they can make a connection to a somewhat regular wage-paying job.

We can address cyclical unemployment by expansionary fiscal and monetary policy. The natural rate of unemployment can be harder to solve, because it involves thinking carefully about the tradeoffs involved in laws that affect employment and hiring. Unemployment is understood differently in high-income countries compared to low- and middle-income countries. People in these countries are not “unemployed” in the sense that we use the term in the United States and Europe, but neither are they employed in a regular wage-paying job. While some may have regular wage-paying jobs, others are part of a barter economy.

a monetary policy that increases the supply of money and the quantity of loans

the amount of total spending on domestic goods and services in an economy

a significant decline in national output

economic policies that involve government spending and taxes

tax and spending rules that have the effect of slowing down the rate of decrease in aggregate demand when the economy slows down and restraining aggregate demand when the economy speeds up, without any additional change in legislation

the government passes a new law that explicitly changes overall tax or spending levels with the intent of influencing the level or overall economic activity

Principles of Economics: Scarcity and Social Provisioning (3rd Ed.) Copyright © by Erik Dean; Justin Elardo; Mitch Green; Benjamin Wilson; Sebastian Berger; Richard Dadzie; and Adapted from OpenStax Principles of Economics is licensed under a Creative Commons Attribution 4.0 International License , except where otherwise noted.

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Scarring Effects of Unemployment: A Meta-analysis

Introduction, causes of unemployment, effects of unemployment, works cited.

Unemployment causes and effects are vital to recognize in order to solve the problem. Analyzing them can also allow people to realize what consequences are to expect. Yet, first of all, all the essential terminology should be defined.

Unemployment refers to a state of not having a job. It entails individuals with the ability to work, a resolve to find employment, available and in the hunt for employment (Stone 25). Categories of unemployment include classical, structural, frictional, cyclical, and hidden types.

Classical unemployment entails a situation in which earnings received for a job go beyond ordinary levels. This results in limited job vacancies for people. The structural type refers to a situation in which unemployed individuals fail to meet job requirements in terms of skills needed (Stone 29). Frictional unemployment concerns the changeover phase between jobs, while the cyclical one refers to a state in which claims in the economy fail to offer jobs to people. When the claim for goods and services lowers, there is a limited production that requires few workers (Stone 29). Finally, the hidden type refers to the unemployment of prospective workers due to errors made in generating statistics on the subject (Stone 30).

The causes and effects of unemployment impact individuals, society and the economy in general. The overall problem issue results from various factors relating to social, economic, environmental, political and individual elements in an economy. So, to gather both consequences and causes of unemployment, this essay attempts to consider and analyze them separately.

Unemployment results from several causes and factors related to an economy. Some causes are due to personal choices while others are beyond individual control (Stone 31). People invest many resources in gaining reputable education and eligibility for jobs, but often find themselves with no employment (Stone 34). Unemployment results from factors and causes discussed below.

The first cause is inflation. Inflation refers to the progressive increase in prices of commodities and services in the economy. Economic inflation is one of the major causes of unemployment (Stone 37). Inflation results in a limited market activity by economies that cannot match efforts by others due to escalating prices. The economy experiences trouble, and progressively employers fire some workers to reduce the cost of production. This result in unemployment among the individuals fired.

The second cause is recession. Recession refers to decline Gross Domestic Product (GDP) of an economy, employment rate and market activity (Dawson 75). Economic recession links directly with economic inflation. Recession results from inflation where people are not able to afford goods and services offered by the economy (Stone 41).

A decline in production and more imports than exports characterize a recession. These elements influence negatively on GDP of an economy. This results in increased rates of unemployment because many employers refuse to hire while others fire some of their employees (Stone 43).

Another cause is change in technology. Rapid change in technology is driving many employers into diversifying and improving the effectiveness of their workforce (Dawson 78). Some of technology applied replaces individuals in the production process as some process executed manually apply through technology.

This leads to several people losing their jobs. Job dissatisfaction is also another leading cause of unemployment (Dawson 78). New technology results in some employees being involved partially in production activities, which leads to frustration. Frustrations may lead to employee resignation (Dawson 80). This causes unemployment.

Another cause is employee worth (Dawson 85). Employees put a lot of effort and dedication in their activities but often end up unappreciated by their employers. This may result to lack of motivation among employees, which may compel them to stop working for their employers (Dawson 85).

This leads to individuals being unemployed until they find employers who appreciate their efforts. Discrimination in places of work is another cause of unemployment. Discrimination could be because of age, gender, social class, race, religion or ethnic background. Securing a job in such a working environment is extremely difficult and may discourage people from looking for jobs as well as forcing those already in jobs to quit (Dawson 87).

Other causes of unemployment relate to an individual and include disability, attitude towards potential employers, negative perceptions about jobs and employees as well as an individual’s ability to look for a job (Dawson 93). Welfare payments should be discouraged as they reduce the will of unemployed people to look for jobs. People develop dependency on grants and lack any meaning in employment since they are able to meet their basic needs (Dawson 98).

Unemployment has both positive and negative effects. However, negative effects of unemployment surpass positive effects (Stone 65). Unemployed individuals experience difficulties meeting their basic needs as well as contributing to economic prosperity of their countries (Stone 66). In recessions, many people lose their jobs, but companies usually develop mechanisms to produce more goods with limited workforce. Unemployment leads to effects discussed below.

The first effect is loss of income. Unemployment results in individuals losing their source of income and livelihood. Most people in employment use their incomes to get mortgages and other forms of financing (Stone 69). Loss of income leads to poor living standards and increased risk on health.

Another effect of unemployment is social exclusion. A work place provides a platform for socialization. When people lose their jobs, their social circle reduces considerably and end up excluded from the social environment. Other social problems associated with unemployment include crime, bribery and gambling (Stone 70).

Unemployment causes political instability (Stone 75). When majority of a country’s population is unemployed, life becomes hard, and people develop hostile characters. They consider their government as ineffective and incapable of providing the needs of its people (Stone 76). Such individuals participate in movements that oppose government policies through riots that result in political instability.

effects of unemployment include over exploitation of available labor, reduced rate of economic growth, reduced human capacity, loss of human resources and increase in poverty levels (Dawson 101). One positive effect of unemployment is the availability of adequate labor at reduced market prices. When many people are unemployed, labor is available at competitive prices because people are always eager to have some income (Stone 80).

Unemployment has various categories that include classical, structural, frictional, cyclical and hidden unemployment (Stone 26). Unemployment results from several factors that vary in terms of the supporting conditions. Some causes are due to personal choices while others are beyond individual control. Unemployment has both positive and negative effects, although negative effects surpass positive effects. Welfare payments should be discouraged as they reduce the will of unemployed people to look for jobs (Stone 50).

People should be encouraged to look for a job instead of waiting on grants because they may not achieve financial freedom to satisfactory levels. In order to reduce the effects of unemployment, governments should develop and implement policies that regulate circumstances in which an employer can fire an employee (Dawson 90). This will prevent victimization of employees by employers who take advantage of weak policies on labor regulation and employee protection.

Dawson, Graham. Inflation and Unemployment: Causes, Consequences and Cures . California: University of California, 2008. Print.

Stone, Jack. Unemployment: The Shocking Truth of Its Causes, Its Outrageous Consequences and What Can Be Done About It . New York: Trafford on Demand Pub, 2007. Print.

The Meta-Synthesis and Meta-Analysis Effect on Research Translation
Meta-Analysis: Advantages and Disadvantages
Meta-Analysis: The Critical Links of Success
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Three Major Theories of Motivation
Impression management
Americans’ Workaholism as the Pursuit of “Happyness”
Chicago (A-D)
Chicago (N-B)

IvyPanda. (2018, November 30). Scarring Effects of Unemployment: A Meta-analysis. https://ivypanda.com/essays/causes-and-effects-of-unemployment/

"Scarring Effects of Unemployment: A Meta-analysis." IvyPanda , 30 Nov. 2018, ivypanda.com/essays/causes-and-effects-of-unemployment/.

IvyPanda . (2018) 'Scarring Effects of Unemployment: A Meta-analysis'. 30 November.

IvyPanda . 2018. "Scarring Effects of Unemployment: A Meta-analysis." November 30, 2018. https://ivypanda.com/essays/causes-and-effects-of-unemployment/.

1. IvyPanda . "Scarring Effects of Unemployment: A Meta-analysis." November 30, 2018. https://ivypanda.com/essays/causes-and-effects-of-unemployment/.

Bibliography

IvyPanda . "Scarring Effects of Unemployment: A Meta-analysis." November 30, 2018. https://ivypanda.com/essays/causes-and-effects-of-unemployment/.

COVID crisis to push global unemployment over 200 million mark in 2022

A hospital kitchen worker in France prepares meals for patients.

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The economic crisis caused by the COVID pandemic is expected to contribute to global unemployment of more than 200 million people next year, with women and youth workers worst-hit, UN labour experts said on Wednesday.

The International Labour Organization ( ILO ) also maintained in a new report that although the world’s nations “will emerge” from the ongoing health crisis, “five years of progress towards the eradication of working poverty have been undone” nonetheless.

The labour market crisis created by the #COVID19 pandemic is far from over. Employment growth will be insufficient to make up for the losses suffered until at least 2023. Check out the new ILO WESO Trends report: https://t.co/frEhP1ktgS pic.twitter.com/CeRaO0O0gm International Labour Organization ilo

“We’ve gone backwards, we’ve gone backwards big time,” said ILO Director-General Guy Ryder. “Working poverty is back to 2015 levels; that means that when the 2030 Sustainable Development Agenda was set, we’re back to the starting line.”

The worst-affected regions in the first half of 2021 have been Latin America and the Caribbean, Europe and Central Asia, all victims of uneven recovery.

They’ve seen estimated working-hour losses exceed eight per cent in the first quarter and six per cent in the second quarter, far higher than the global average (of 4.8 and 4.4 per cent respectively).

Women’s roles questioned

Women have been hit “disproportionately” by the crisis, seeing a five per cent employment fall in 2020, compared to 3.9 per cent for men.

“A greater proportion of women also fell out of the labour market, becoming inactive,” ILO said, noting that “additional domestic responsibilities” had resulted from lockdowns which risked a “re-traditionalization” of gender roles.

Youth employment has also continued to suffer the economic downturn, falling 8.7 per cent in 2020, compared with 3.7 per cent for adults.

The most pronounced fall has been in middle-income countries where the consequences of this delay and disruption to the early labour market experience of young people “could last for years”, ILO warned.

$3.20 a day

Pandemic-related disruption has also brought “catastrophic consequences” for the world’s two billion informal sector workers.

Compared to 2019, an additional 108 million workers worldwide are now categorized as “poor” or “extremely poor” – meaning that they and their families live on the equivalent of less than $3.20 per person, per day.

“While signs of economic recovery are appearing as vaccine campaigns are ramped up, the recovery is likely to be uneven and fragile,” Mr Ryder said, as ILO unveiled its forecast that global unemployment will reach 205 million people in 2022, up from 187 million in 2019.

The Geneva-based organization also projected a “jobs gap” increase of 75 million in 2021, which is likely to fall to 23 million in 2022 – if the pandemic subsides.

The related drop in working-hours, which takes into account the jobs gap and those working fewer hours, amounts to the equivalent of 100 million full-time jobs in 2021 and 26 million in 2022.

Young employees at a tech company in Ankara, Turkey, focus on digital marketing and computer services.

“This shortfall in employment and working hours comes on top of persistently high pre-crisis levels of unemployment, labour underutilization and poor working conditions,” ILO said in World Employment and Social Outlook: Trends 2021, (WESO Trends) .

The ILO report maintained that although global employment recovery should accelerate in the second half of 2021, it will likely be an uneven recovery.

Unequal vaccine access is to blame, ILO insisted, in addition to the limited capacity of most developing and emerging economies to support the strong fiscal stimulus measures that have characterised the approach of the world’s wealthiest countries to the COVID-induced downturn.

Decent jobs essential

“Without a deliberate effort to accelerate the creation of decent jobs, and support the most vulnerable members of society and the recovery of the hardest-hit economic sectors, the lingering effects of the pandemic could be with us for years in the form of lost human and economic potential and higher poverty and inequality,” said Mr. Ryder. “We need a comprehensive and co-ordinated strategy, based on human-centred policies, and backed by action and funding. There can be no real recovery without a recovery of decent jobs.”

global economy

18.3 Causes of Unemployment Around the World

Learning objectives.

Explain the nature and causes of unemployment
Analyze the natural rate of unemployment and the factors that affect it
Identify how undeveloped labor markets can result in the same hardships as unemployment

Unemployment From a Recession

With regard to fiscal policy , the automatic stabilizers discussed in Government Budget and Fiscal Policy should be allowed to work, even if this means larger budget deficits in times of recession. There is less agreement over whether, in addition to automatic stabilizers, governments in a recession should try to adopt discretionary fiscal policy of additional tax cuts or spending increases. In the case of the Great Recession, the case for this kind of extra-aggressive expansionary fiscal policy is stronger, but, for a smaller recession, given the time lags of implementing fiscal policy, discretionary fiscal policy should be used with caution.

However, the aftermath of the Recession emphasizes that expansionary fiscal and monetary policies do not turn off a recession like flipping a switch turns off a lamp. Even after a recession is officially over and positive growth has returned, it can take some months—or even a couple of years—before private-sector firms believe the economic climate is healthy enough that they can expand their workforce.

The Natural Rate of Unemployment

Unemployment rates in the nations of Europe have typically been higher than in the United States. In 2006, before the start of the Great Recession , the U.S. unemployment rate was 4.6 percent, compared with 9 percent in France, 10.4 percent in Germany, and 7.1 percent in Sweden. The pattern of generally higher unemployment rates in Europe, which dates back to the 1970s, is typically attributed to the fact that European economies have a higher natural rate of unemployment because they have a greater number of rules and restrictions that discourage firms from hiring and unemployed workers from taking jobs.

Addressing the natural rate of unemployment is straightforward in theory but difficult in practice. Government can play a useful role in providing unemployment and welfare payments, passing rules about where and when businesses can operate, assuring that the workplace is safe, and so on. But these well-intentioned laws can, in some cases, become so intrusive that businesses decide to place limits on their hiring.

For example, a law that imposes large costs on a business that tries to fire or lay off workers will mean that businesses try to avoid hiring in the first place, as is the case in France. According to Business Week (Viscusi, 2012), France “has 2.4 times as many companies with 49 employees as with 50. . . . according to the French labor code, once a company has at least 50 employees inside France, management must create three worker councils, introduce profit sharing, and submit restructuring plans to the councils if the company decides to fire workers for economic reasons.” This labor law essentially limits employment—or raises the natural rate of unemployment.

Undeveloped Labor Markets

Low-income and middle-income countries face employment issues that go beyond unemployment as it is understood in the high-income economies. A substantial number of workers in these economies provide many of their own needs by farming, fishing, or hunting. They barter and trade with others and may take a succession of short-term or one-day jobs, sometimes being paid with food or shelter, sometimes with money. They are not unemployed in the sense that the term is used in the United States and Europe, but neither are they employed in a regular wage-paying job.

The starting point of economic activity, as discussed in Welcome to Economics! , is the division of labor, in which workers specialize in certain tasks and trade the fruits of their labor with others. Workers who are not connected to a labor market are often unable to specialize very much. Because these workers are not officially employed, they are often not eligible for social benefits like unemployment insurance or old-age payments—if such payments are even available in their country. Helping these workers to become more connected to the labor market and the economy is an important policy goal. Indeed, recent research by development economists suggests that one of the key factors in raising people in low-income countries out of the worst kind of poverty is whether they can make a connection to a somewhat regular wage-paying job.

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Macroeconomic Policy Around the World

Causes of unemployment around the world, learning objectives.

By the end of this section, you will be able to:

Explain the nature and causes of unemployment
Analyze the natural rate of unemployment and the factors that affect it
Identify how undeveloped labor markets can result in the same hardships as unemployment

Unemployment from a Recession

The Natural Rate of Unemployment

For example, a law that imposes large costs on a business that tries to fire or lay off workers will mean that businesses try to avoid hiring in the first place, as is the case in France. According to Business Week , “France has 2.4 times as many companies with 49 employees as with 50 … according to the French labor code, once a company has at least 50 employees inside France, management must create three worker councils, introduce profit sharing, and submit restructuring plans to the councils if the company decides to fire workers for economic reasons.” This labor law essentially limits employment (or raises the natural rate of unemployment).

Undeveloped Labor Markets

The starting point of economic activity, as we discussed in Welcome to Economics! , is the division of labor, in which workers specialize in certain tasks and trade the fruits of their labor with others. Workers who are not connected to a labor market are often unable to specialize very much. Because these workers are not “officially” employed, they are often not eligible for social benefits like unemployment insurance or old-age payments—if such payments are even available in their country. Helping these workers to become more connected to the labor market and the economy is an important policy goal. Recent research by development economists suggests that one of the key factors in raising people in low-income countries out of the worst kind of poverty is whether they can make a connection to a somewhat regular wage-paying job.

Key Concepts and Summary

Self-Check Questions

What are the different policy tools for dealing with cyclical unemployment?

If there is a recession and unemployment increases, we can call on an expansionary fiscal policy (lower taxes or increased government spending) or an expansionary monetary policy (increase the money supply and lower interest rates). Both policies stimulate output and decrease unemployment.

Explain how the natural rate of unemployment may be higher in low-income countries.

Aside from a high natural rate of unemployment due to government regulations, subsistence households may be counted as not working.

Review Questions

What are the two types of unemployment problems?

In low-income countries, does it make sense to argue that most of the people without long-term jobs are unemployed?

Critical Thinking Question

Is it possible to protect workers from losing their jobs without distorting the labor market?

Explain what will happen in a nation that tries to solve a structural unemployment problem using expansionary monetary and fiscal policy. Draw one AD/AS diagram, based on the Keynesian model, for what the nation hopes will happen. Then draw a second AD/AS diagram, based on the neoclassical model, for what is more likely to happen.

Retrieve the unemployment data from The World Bank database (http://databank.worldbank.org/data/home.aspx) for India, Spain, and South Africa for 2011-2015. Prepare a chart that compares India, Spain, and South Africa based on the data. Describe the key differences between the countries. Rank these countries as high-, medium-, and low-income countries. Explain what is surprising or expected about this data. How did the Great Recession impact these countries?

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The pandemic has damaged youth employment: Here’s how we can help

young people like this woman lost their jobs due to the pandemic

Action needs to be taken to increase employment levels for young people. Image: Unsplash/Tim Gouw

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leading causes of unemployment around the world essay

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A hand holding a looking glass by a lake

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Stay up to date:, future of work.

Young people were left unemployed by the pandemic in far greater numbers than adults, with the effects being felt worse in lower income countries.
Young women have tended to be more likely to become unemployed as a result of COVID-19 disruption than young men.
The equivalent of 255 million full-time jobs were lost around the world due to the pandemic, according to data from the International Labour Organization.

Around the world in 2020, youth employment dropped by 8.7%. For adults the fall in employment was less severe, registering at 3.7%. This difference illustrates the extent of the pandemic’s economic consequences for younger people.

Unless action is taken to tackle the way the pandemic has affected young people’s employment opportunities, many of them could continue to struggle for decades, according to the International Labour Organization (ILO).

A ‘far deeper’ setback

The economic hit inflicted on the global economy in 2020 was “far deeper” than the one seen in 2009, following the global financial crisis. The effects have been felt all around the world. In April 2020, the US experienced its highest rate of unemployment (14.8%) since records began .

The challenge of the economic disenfranchisement of young people is also featured in the World Economic Forum’s Global Risk Report 2021 . “Today’s youth already bear the scars of a decade-long financial crisis, an outdated education system, and an entrenched climate crisis, as well as violence in many places,” the report says.

With “lockdown and other containment measures, most notably in the second quarter of 2020,” enacted in most countries, the ILO says the effects of pandemic-induced economic harm were widespread. “Output in emerging and developing economies is estimated to have declined by 2.2% in 2020 compared with a fall of 4.7% in advanced economies.”

this graph shows the real GDP growth rates from 2005 to 2022 (%) show the scale of the global crisis in 2020.

The number of working hours that disappeared because of COVID-19 are equivalent to 255 million full-time jobs being lost around the world. Not only have young people suffered more than adults, but young women have been hit hardest by unemployment during the pandemic.

Have you read?

What you need to know about the european green deal - and what comes next, generation covid: how young people are bouncing back, one-third of young people still optimistic despite covid's dramatic hit on education and jobs.

ILO figures (based on a sample of 58 countries) show that employment fell by 11.2% for young men and 13.9% for young women in the second quarter of 2020. The effects on young men and young women in middle-income economies were around double, the ILO says.

It also refers to estimated data from the US that suggests even a moderate recession – one that raises unemployment rates by 3 points – can lead to a cumulative loss of earnings equivalent to 60% of one year’s earnings.

these graphs show the comparison of employment trends for young people (15-24) and adults (25+) in 2020, selected countries

Policy priorities to help aid recovery

Although the pandemic lies at the heart of increased youth unemployment, there have been multiple specific events leading to people being out of work. For example, it may have been due to industry- or sector-wide closures caused by lockdowns. Retail and hospitality are two such sectors where widespread closures led to large numbers of lay-offs. Others, working in more marginalized forms of employment may have found that opportunities to make money had dried up.

But there are also many young people whose education and training have been disrupted, leaving them – in some cases – economically inactive.

Resolving these scenarios requires an understanding of the intersectionality of people’s circumstances. In short, one size will not fit all when it comes to planning a recovery of employment prospects for young people, the ILO says.

It recommends a series of policy-driven initiatives and interventions to help turn things around.

Encourage job creation

Stimulate new employment and entrepreneurship, focusing on the most vulnerable young people and getting them into work.

Education and training retention

Get more young people to study and train to fill any skills gaps that may have arisen due to disruptions during the pandemic.

Re-entry programmes

Those young people who have lost their jobs should be supported through employment services, entrepreneurship schemes, and programmes that target their entry or re-entry into work.

The Global Alliance for Social Entrepreneurship is one of the largest multi-stakeholder collaborations in the social innovation sector.

The Alliance has 100 members – corporations, investors, philanthropists, governments, researchers, media, and industry actors – who work together to build an engaged ecosystem of key public and private sector leaders in support of a social innovation movement that transforms society to be more just, sustainable and equitable.

Launched in response to the COVID-19 crisis by the Schwab Foundation for Social Entrepreneurship together with Ashoka, Catalyst2030, Echoing Green, GHR Foundation, Skoll Foundation, and Yunus Social Business in April 2020.

In that pursuit, the Global Alliance will continue to mobilise a trusted community of leaders together with core partners - SAP, Bayer Foundation, Motsepe Foundation, GHR Foundation, Porticus, Deloitte, Microsoft and Catalyst 2030, that acts and learns together so that social entrepreneurs can flourish.

Extending social protections

Keeping young people in the formal economy calls for initiatives that make them less likely to seek money-making opportunities through informal activities. The payment of unemployment benefits can play a part in this.

Safeguarding workers’ rights

It will be important to ensure young workers in particular feel they have a voice in the workplace. To that end, they should be included in collective bargaining, freedom of association, social dialogue and social partnership policies.

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License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

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19.3 Causes of Unemployment around the World

Learning objectives.

Explain the nature and causes of unemployment
Analyze the natural rate of unemployment and the factors that affect it
Identify how undeveloped labor markets can result in the same hardships as unemployment

Unemployment from a Recession

The Natural Rate of Unemployment

Undeveloped Labor Markets

The starting point of economic activity, as we discussed in Welcome to Economics! , is the division of labor, in which workers specialize in certain tasks and trade the fruits of their labor with others. Workers who are not connected to a labor market are often unable to specialize very much. Because these workers are not “officially” employed, they are often not eligible for social benefits like unemployment insurance or old-age payments—if such payments are even available in their country. Helping these workers to become more connected to the labor market and the economy is an important policy goal. Recent research by development economists suggests that one of the key factors in raising people in low-income countries out of the worst kind of poverty is whether they can make a connection to a somewhat regular wage-paying job.

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Publication date: Oct 11, 2017
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Section URL: https://openstax.org/books/principles-macroeconomics-2e/pages/19-3-causes-of-unemployment-around-the-world

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Economy & Politics ›

Unemployment worldwide - Statistics & Facts

What affects the unemployment rate, youth unemployment, effect of unemployment on health, key insights.

Detailed statistics

Global unemployment rate 2004-2023

Number of unemployed persons worldwide 1991-2024

Breakdown of unemployment rates in G20 countries 2024

Editor’s Picks Current statistics on this topic

Unemployment rate in selected world regions 2022

Government Finances

Breakdown of G20 countries with the highest youth unemployment rates 2023

Further recommended statistics

Unemployment worldwide.

Basic Statistic Global unemployment rate 2004-2023
Basic Statistic Number of unemployed persons worldwide 1991-2024
Premium Statistic Breakdown of unemployment rates in G20 countries 2024
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Unemployment rate of G20 countries in 2024

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Quarterly unemployment rates in developed and emerging countries 2017-2024

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Number of unemployed persons in selected world regions in 2021 and 2022, up to 2024 (in millions)

Monthly unemployment rate in industrial and emerging countries August 2023

Unemployment rate in the leading industrial and emerging countries from August 2022 to August 2023

Country comparison

Basic Statistic Unemployment rate in the United States 1991-2022
Basic Statistic Unemployment rate in the United Kingdom 2022
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Basic Statistic Unemployment rate in the EU October 2023, by country

Unemployment rate in the United States 1991-2022

United States: Unemployment rate from 1999 to 2022

Unemployment rate in the United Kingdom 2022

Unemployment rate in the United Kingdom (UK) from 1999 to 2022

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Japan: Unemployment rate from 1999 to 2022

Unemployment rate in China 2017-2029

Unemployment rate in urban China from 2017 to 2023 with forecasts until 2029

Unemployment rate in Brazil 2022

Brazil: Unemployment rate from 1999 to 2022

Unemployment rate in South Africa 2023

South Africa: Unemployment rate from 2004 to 2023

Unemployment rate in the EU October 2023, by country

Unemployment rate in the European Union as of October 2023, by country

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Basic Statistic Youth unemployment rate in the United States in 2023
Basic Statistic Youth unemployment rate in EU countries August 2023

Youth unemployment rate of G20 countries in 2023

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Number of young unemployed people worldwide from 2010 to 2024 (in millions)

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Youth unemployment rate in selected world regions in 2000 to 2022

Countries with highest youth unemployment rate worldwide 2022

20 countries with the highest youth unemployment rate worldwide in 2022

Youth unemployment rate in the European Union and the euro area 2021

Youth unemployment rate in the European Union and the euro area from 2011 to 2021

Youth unemployment rate in the United States in 2023

United States: Youth unemployment rate from 2004 to 2023

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Youth unemployment rate in EU member states as of August 2023 (seasonally adjusted)

Coronavirus pandemic and unemployment

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Number of tech employees laid off worldwide from 2020 to 2023, by industry

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Impact on unemployment rate due to the coronavirus (COVID-19) lockdown in India from January 2020 to May 2022

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Number of jobs lost during the COVID-19 pandemic in Latin America and the Caribbean from 1st quarter to 4th quarter 2020, by subregion (in millions)

Number of working hours lost worldwide from Q1 2020 to Q2 2022

Estimated number of working hours lost worldwide from 1st quarter 2020 to 2nd quarter 2022, in full-time equivalent jobs (in millions)

Unemployment length in travel sector during coronavirus pandemic in China 2022

Unemployment length among those who lost their jobs in tourism sector during COVID-19 pandemic in China as of February 2022

COVID-19 impact on jobs in the out-of-home leisure economy in the UK, by subsector

Estimated number of job losses in the out-of-home leisure economy due to the coronavirus (COVID-19) pandemic in the United Kingdom (UK) in 2020, by subsector (in 1,000 jobs)

Perceptions about unemployment

Basic Statistic Most important national issues in the European Union 2023
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Leading socio-political and economic challenges faced in Southeast Asia in 2023, by country

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Main problems of Argentina in 2024

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Main problems of Mexico according to the public opinion in March 2023

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Monthly share of people who are worried about unemployment and jobs in South Africa from January 2022 to September 2023

Unemployment benefits

Basic Statistic U.S. average duration of unemployment benefit collection 2021
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Distribution of unemployment benefit recipients according to the monthly compensation amount in France in June 2021

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Unemployment benefit spending as a percentage of GDP in Spain from 2022 to 2026

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Home — Essay Samples — Economics — Unemployment — Unemployment: Causes, Effects, and Solutions

Unemployment: Causes, Effects, and Solutions

Categories: Unemployment

About this sample

Words: 685 |

Published: Jan 30, 2024

Words: 685 | Pages: 2 | 4 min read

Introduction, causes of unemployment, effects of unemployment, solutions to combat unemployment, a. economic factors.

Global recession: During economic downturns, companies may reduce employment to cut costs and remain competitive.
Automation and technological advancements: The use of machines and technology may replace human workers in some industries, leading to job losses.
Outsourcing of jobs: Companies may choose to outsource jobs to other countries where labor costs are lower, leaving domestic workers unemployed.

B. Societal Factors

Lack of education and skills: Individuals without proper education and job training may be ill-equipped to meet the demands of a constantly evolving job market.
Discrimination in hiring processes: Certain groups, such as women, minorities, and older workers, may face barriers in securing employment due to discrimination.
Dependency on welfare programs: Some individuals may choose to remain on welfare programs due to a lack of incentive to enter the workforce or because they cannot find suitable employment.

A. Economic Effects

Reduction in consumer spending: Without a steady income, unemployed individuals may have less money to spend, resulting in a decline in consumer spending.
Decline in government revenue: With fewer people working, the government may see a decline in tax revenue, which can impact its ability to provide necessary services and promote economic growth.
Increase in social welfare expenses: The government may need to allocate more funds toward social welfare programs, such as unemployment benefits and food assistance, to support those who are unemployed.

B. Social Effects

Increase in crime rates: Individuals who are unemployed may resort to criminal activities to make ends meet, leading to a rise in crime rates.
Mental health issues: Unemployment can cause stress, anxiety, and depression, which can negatively impact an individual's mental health.
Strained relationships and family instability: Unemployment may cause financial strain and tension within families, leading to relationship problems and instability.

A. Economic Solutions

Encouraging entrepreneurship and small business development: Providing resources and support for individuals to start their own businesses can lead to job creation and economic growth.
Promoting vocational training and skill development programs: Ensuring that individuals have access to education and training programs can increase their job readiness and competitiveness in the job market.
Implementing balanced trade policies: Creating policies that promote fair trade and reduce job outsourcing can protect domestic jobs and promote job growth.

B. Social Solutions

Addressing educational disparities and providing access to quality education: Providing quality education to disadvantaged communities can improve their job readiness and reduce unemployment rates.
Combating discrimination in the workplace: Enforcing anti-discrimination laws and promoting diversity and inclusion in the workplace can reduce barriers to employment for certain groups.
Strengthening social safety net programs: Ensuring that social welfare programs are designed to incentivize work and provide support to those in need can promote economic stability and reduce poverty.
Bureau of Labor Statistics. (2021, October 8). Employment Situation Summary. https://www.bls.gov/news.release/empsit.nr0.htm

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Unemployment is a very serious issue not only in India but in the whole world. There are hundreds and thousands of people out there who do not have employment . Besides, the problems of unemployment are very severe in India because of the growing population and demand for jobs. Moreover, if we neglect this problem then it will be going to become the reason for the doom of the nation.

What is Unemployment?

Unemployment refers to a situation in which a skilled and talented people wanted to do a job. But cannot find a proper job due to several reasons.

Types of Unemployment

Now we know what is unemployment but unemployment does not only mean that the person does not have a job. Likewise, unemployment also includes people working in areas out of their expertise.

The various types of unemployment include disguised unemployment, seasonal unemployment, open unemployment, technological unemployment, structural unemployment. Besides, some other unemployment is cyclic unemployment, educated unemployment, underemployment, frictional unemployment, chronic unemployment, and casual unemployment.

Above all, seasonal unemployment, under unemployment, and disguised unemployment are the most common unemployment that is found in India.

Reasons for Unemployment

In a country like India, there is much reason for a large section of the population for being unemployed. Some of these factors are population growth, slow economic growth , seasonal occupation, slow growth of the economic sector, and fall in the cottage industry.

Moreover, these are the major reason for unemployment in India. Also, the situation has become so drastic that highly educated people are ready to do the job of a sweeper. Besides, the government is not doing his work seriously.

Apart from all these, a large portion of the population is engaged in the agricultural sector and the sector only provides employment in harvest or plantation time.

In addition, the biggest reason of unemployment in India is its vast population which demands a large number of jobs every year which the government and authorities are unable to provide.

Consequences of Unemployment

If things will go on like the current scenario then unemployment will become a major issue. Apart from this, the following things happen in an economy which is an increase in poverty, an increase in crime rate, exploitation of labor, political instability, mental health, and loss of skills. As a result, all this will eventually lead to the demise of the nation.

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Initiative by Government

The government has taken the problem very seriously and have taken measures to slowly reduce unemployment. Some of these schemes includes IRDP (Integrated Rural Development Programme), DPAP (Drought Prone Area Programme), Jawahar Rozgar Yojana, Employment Assurance Scheme, NRY (Nehru Rozgar Yojana), Training for self-Employment, PMIUPEP (Prime Minister’s Integrated Urban Poverty Eradication Program), employment exchange, Employment Guarantee Scheme, development of organized sector, small and cottage industries, employment in forging countries, and Jawahar Gram Samridhi Yojana and few more.

Besides, these schemes the government also make some rules flexible, so that employment can be created in the private sector also.

To conclude, we can say that the problem of unemployment in India has reached a critical stage. But, now the government and local authorities have taken the problem seriously and working on it to reduce unemployment. Also, to completely solve the issue of unemployment we have to tackle the main issue of unemployment that is the vast population of India.

FAQs about Unemployment

Q.1 Why there is a problem of unemployment in India? A.1 Due to overpopulation and lack of proper skills there is a problem of unemployment in India.

Q.2 Define Disguised unemployment? A.2 Disguised unemployment refers to a form of employment in which more than the required numbers of people work in industry or factory. And removing some employee will not affect productivity.

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Part 32: Macroeconomic Policy Around the World

32.3 Causes of Unemployment around the World

Learning objectives.

By the end of this section, you will be able to:

Explain the nature and causes of unemployment
Analyze the natural rate of unemployment and the factors that affect it
Identify how undeveloped labor markets can result in the same hardships as unemployment

Unemployment from a Recession

The Natural Rate of Unemployment

For example, a law that imposes large costs on a business that tries to fire or lay off workers will mean that businesses try to avoid hiring in the first place, as is the case in France. According to Business Week , “France has 2.4 times as many companies with 49 employees as with 50 … according to the French labor code, once a company has at least 50 employees inside France, management must create three worker councils, introduce profit sharing, and submit restructuring plans to the councils if the company decides to fire workers for economic reasons.” This labor law essentially limits employment (or raises the natural rate of unemployment).

Undeveloped Labor Markets

The starting point of economic activity, as we discussed in Welcome to Economics! , is the division of labor, in which workers specialize in certain tasks and trade the fruits of their labor with others. Workers who are not connected to a labor market are often unable to specialize very much. Because these workers are not “officially” employed, they are often not eligible for social benefits like unemployment insurance or old-age payments—if such payments are even available in their country. Helping these workers to become more connected to the labor market and the economy is an important policy goal. Recent research by development economists suggests that one of the key factors in raising people in low-income countries out of the worst kind of poverty is whether they can make a connection to a somewhat regular wage-paying job.

Key Concepts and Summary

Self-Check Questions

What are the different policy tools for dealing with cyclical unemployment?

Explain how the natural rate of unemployment may be higher in low-income countries.

Aside from a high natural rate of unemployment due to government regulations, subsistence households may be counted as not working.

Review Questions

What are the two types of unemployment problems?

In low-income countries, does it make sense to argue that most of the people without long-term jobs are unemployed?

Critical Thinking Question

Is it possible to protect workers from losing their jobs without distorting the labor market?

Principles of Econ 2e by OpenStax @ Rice University is licensed under a Creative Commons Attribution 4.0 International License , except where otherwise noted.

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Undoing the Stigma of Unemployment

Man in business suit disintegrating into a flurry of papers

W ith the looming 2024 elections in mind, one of the most discussed puzzles of our time is why Americans report feeling economically anxious despite a low unemployment rate, declining inflation, and other positive economic indicators. My research on American workers points to one of the root causes of this anxiety. It focuses on the kind of workers we might expect to have little to worry about—experienced, college-educated, white-collar professionals—including some with advanced degrees from elite universities like Harvard and MIT. Focusing on this group reveals that in the contemporary United States the careers of even the most privileged workers are anxiety-filled and precarious.

Regardless of prestigious degrees and impressive work experience, the careers of almost all American workers are made unpredictable by routine layoffs. It was not always like this. In the post-World War II era white-collar workers at large companies could reasonably expect to stay at one company for decades. But since the 1980s job security has crumbled, and currently about 3 out of 4 American workers become unemployed at some point in their career.

Yet, economic anxiety extends beyond mere layoffs. It is foremost rooted in the fear of not being able to bounce back after a layoff, and getting trapped in long-term unemployment or low-wage work. This fear is well-founded, even for experienced college-educated professionals. A 2013 study by the Economic Policy Institute reveals that if a college-educated worker becomes unemployed they are as likely as any other worker—of whatever level of education—to get trapped in long-term unemployment. Even after a prolonged search, many get stuck in low-wage jobs. Downward mobility does not show up in unemployment statistics, but it shatters lives.

American workers are anxious because anyone can fall. There are no reliable shields against an invisible but powerful force which can rapidly erase past educational and professional achievements: stigma. Once a worker becomes unemployed they are stigmatized in the eyes of potential employers. This can be clearly seen in studies where researchers send fake resumes to companies with real job openings. These resumes are identical in terms of skills and qualifications and differ only in whether or not the applicant has a current employment gap. From these studies, we know that employers are far less likely to invite unemployed applicants for job interviews.

Read More: The U.S. Spends Less Than Nearly Every Country on Unemployment. That’s Why People Can’t Get Jobs.

I interviewed recruiters to gain a better understanding of the unemployment stigma. After assuring them that they will remain anonymous, the recruiters openly discussed the widely shared assumptions of employers about unemployed applicants. One recruiter explained: “A company could lay off people for a wide variety of reasons. But there is that perception that very often those folks who have been laid off or out of work for any length of time are not going to be the top people out there.” In practice, this perception often translates to an employer preference for “passive jobseekers,” referring to workers currently working and not actively looking for work; or in other words, workers who are not unemployed. Here is how one recruiter succinctly summed up the widely shared sentiment underlying the preference for passive jobseekers: “The sense is that if someone is good, they would be working.” When reflecting on it, this recruiter acknowledged that “this logic is crap,” recalling his own experience: “I was a top-performer and the whole group was laid off.” But, nonetheless, even this recruiter who recognized employers’ flawed logic, felt compelled to follow the preference of his employer clients for passive jobseekers.

It is not only employers who stigmatize. As the unemployed workers I’ve interviewed in the course of my research repeatedly emphasized, they experienced the unemployment stigma in every realm of their life, including when trying to network with former colleagues, or even when turning to their spouses or close friends for support.

The stigma of unemployment is everywhere because most of us want to believe in the myth of meritocracy—the false assumption that one’s position reflects one’s merit. The pull of this myth is evident whenever I share stories from my research. Take for example the story of Ron, one of the people I interviewed. Ron is a Harvard graduate who worked in finance for over three decades, most recently at a large and prestigious bank. After a layoff he spent three years unsuccessfully trying to get another job in banking. Today, Ron earns poverty-level wages at a department store.

When I share Ron’s story, I am inevitably asked for more details about his particular situation. A story like Ron’s is terrifying to all who hear it because if his career can go off a cliff, so can anyone’s. The thread connecting the various questions is the search for something faulty about Ron, which would reduce the anxiety of the person asking the questions about whether the same fate may await them. I am almost never asked about the hiring process or employer stigmas that may underlie Ron’s difficulties.

The questions’ focus on finding something faulty about Ron show how tenaciously we want to hold on to the belief in meritocratic predictability, that if you do the “right” things, study hard, go to a good college, and get a good job, you’ll do okay. But the dark flipside of this belief is the stigmatization of those who experience unemployment or downward mobility. Hanging on to this belief motivates us to find some reason why the unemployed are at fault for their unemployment, and hence we lead with skeptical questions—which mirror those of employers—about the talent or motivation of anyone who is out of work or has experienced downward mobility.

Ironically, while we cling to the myth of a predictable meritocracy as a way of coping with our anxiety, the myth leaves in place institutions and employer practices that guarantee our perpetual anxiety. The myth of meritocracy means that we judge and stigmatize each other, even our friends and loved ones, instead of providing empathetic support. It means that we blame individuals for what are societal shortcomings, and these shortcomings remain untouched. And ultimately, it means we remain trapped in an economic system in which we are all one layoff away from potential disaster.

The way out of this trap is to confront it head on and shine a bright light on the assumption that unemployment necessarily reflects anything about the unemployed person as opposed to the economy, employers, and the hiring system. Until we do so, we will continue to experience perpetual economic anxiety, regardless of topline economic indicators.

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EssayBanyan.com – Collections of Essay for Students of all Class in English

Essay on Unemployment

We always used to refer youths as the future of the nation, but what about their future? Every human wants to live a luxurious and peaceful life. All his dreams can only come true when they will be able to earn a healthy livelihood. Every student wishes to get a high-paying job after their studies. But what if they don’t get jobs? Today, the youth are facing the problem of unemployment. This not only affects youths and their family but the entire nation as a whole.

Short and Long Unemployment Essay in English

To highlight the growing issue of unemployment and its consequences, today we will discuss Unemployment in detail. Here, we are presenting short and long essays on Unemployment in English for students under word limits of 100 – 150 Words, 200 – 250 words, and 500 – 600 words. This topic is useful for students of classes 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, and 12 in English. These provided essays on Unemployment will help you to write effective essays, paragraphs, and speeches on this topic.

Unemployment Essay 10 Lines (100 – 150 Words)

1) Unemployment is when qualified people are looking for work but unable to find it.

2) Unemployment is primarily due to the scarcity of job opportunities.

3) Unemployment is one of the biggest things that keep a country from growing.

4) When there is unemployment in society, people lose their skills.

5) Unemployment is caused by several things that work in different ways.

6) Changes in technology cause people to lose their jobs, which leads to unemployment.

7) The country’s industrial sector is growing slowly which can result in unemployment.

8) Unemployment is a big problem in places that haven’t developed much yet.

9) A country with a high unemployment rate faces social and economic problems.

10) We need to plan if we want to get rid of unemployment in the country.

Short Essay on Unemployment (200 – 250 Words)

Introduction

The problem of unemployment is growing drastically. However, it is a bad thing for everyone. Unemployment happens when someone who is actively looking for work can’t find a job. However, the unemployed are those people who want to work but can’t find work. In almost every country, unemployment has become a big problem.

Unemployment: The Serious Issue

Unemployment is a problem in a lot of places around the world. When people lose their jobs, they lose self-confidence, get angry, and have bad feelings about everyday things. When unemployment is high, people buy fewer goods and services and pay less in taxes. This means that the government has to manage the nation’s expenses. When there are more people out of work, there are more crimes. Unemployment not only affects the people who are out of work, but also the growth of the country as a whole.

Reasons of Unemployment

Several things can be blamed for unemployment. First of all, the status of the education sector is getting down. Students have more theoretical knowledge but lack practical knowledge. An unhealthy work environment is another reason that can lead to unemployment in the end. As technology gets better, more tasks are done by machines instead of people, making it unnecessary to hire people.

Unemployment is a big problem that must be fixed in any way possible. This is a problem that needs to be fixed by the government. Policymakers and people should work together to make more jobs and learn the right skills to get hired. To find effective and integrated solutions to this problem, it is important to study the different things that are causing it.

Long Essay on Unemployment (500 Words)

Our country has a lot of good schools, colleges, and universities. Thousands of students graduate from there every year. Then also, the number of people without jobs is going up every day. Unemployment arises when people who want to work but don’t find proper jobs. It doesn’t count people who are voluntarily unemployed or who can’t look for work because of illness.

Types of Unemployment

There are different kinds of unemployment, including:

Hidden unemployment: When people are working less than their potential or their skills are unutilized but counted as employed falls in this category.
Cyclical unemployment: When the overall amount of business activity goes down, this causes cyclical unemployment.
Seasonal unemployment: It happens in jobs like construction, farming, and the tourist trade, where the weather or the calendar determines the demand for work.
Long-term unemployment: It occurs when someone has been out of work for a year or more.
Underemployment: It occurs when a person is overqualified for work or works part-time.
Hardcore unemployment: Hardcore unemployment is a term for people who have been out of work for a long time.
Structured unemployment : It happens when there are too many unemployed people for the number of open jobs.
Frictional unemployment: It happens when there aren’t enough people to fill jobs in the same jobs and the same places.

Causes of Unemployment

The first reason for unemployment is the growing population. This is also because of how our education system works. Our schools and colleges focus more on theoretical knowledge than practical training for jobs. Changes in technology are one of the most important reasons why people lose their jobs. Many employees are unhappy with their jobs. When companies treat people differently based on their caste, religion, race, etc, they make it harder for people to work there.

Effects of Unemployment

Having no job means not having a way to make money. Unemployment is a big problem that slows down both individual and national progress. When people can’t get enough work to meet their needs, crime rates go up. The number of people who are homeless and who are mentally or physically sick is going up. If you don’t have a job for a long time, you get bored and eventually lose your skills.

Unemployment in India

India is a developing country with an economy that isn’t as strong as it could be. Unemployment in India is different from unemployment in developed economies. India’s unemployment problem is not caused by a lack of effective demand. Instead, it is caused by a lack of capital equipment and other resources, along with a high rate of population growth. India has a bigger problem with underemployment than it does with unemployment.

Unemployment is a big problem for all economies. For a developing economy, both the government and individuals need to take steps to increase productivity and raise the standard of living.

I hope the above provided essay on Unemployment will be helpful in understanding the effects and causes of unemployment in a country.

FAQs: Frequently Asked Questions on Unemployment

Ans. The unemployment rate can be defined as the percentage of persons who are actively seeking employment but are unable to find it.

Ans. From April to June 2022, the unemployment rate in urban centers of India was 7.6%.

Ans. Rajasthan is the highest unemployed state in India.

Ans. Maharashtra has the highest employment in India as per 2022 records.

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Middle East Crisis Spain, Norway and Ireland Recognize a Palestinian State, a Blow to Israel

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A paramedic helping a wounded Palestinian man during clashes with Israeli forces in the West Bank city of Jenin. Leo Correa/Associated Press
In Tel Aviv, viewing pictures of hostages taken by Hamas on Oct. 7. Marko Djurica/Reuters
Waiting to collect water in Khan Younis, in the southern Gaza Strip. Mohammed Salem/Reuters
Clashes between Palestinian protesters and Israeli forces in Jenin. Zain Jaafar/Agence France-Presse — Getty Images
A mosque destroyed in a strike in Khan Younis. Mohammed Salem/Reuters

Recognitions of Palestinian statehood are a rebuke to Israel, if a largely symbolic one.

Spain, norway and ireland recognize palestinian statehood, the closely coordinated announcements by the three nations served as a rebuke to israel..

Today, Ireland, Norway and Spain are announcing that we recognize the state of Palestine. Ireland asked the world to recognize our right to be an independent state. Our message to the free nations of the world was a plea for international recognition of our independence, emphasizing our distinct national identity, our historical struggle, and our right to self-determination and justice. Today, we use the same language to support the recognition of Palestine as a state.

Spain, Norway and Ireland said on Wednesday that they would recognize an independent Palestinian state, a rebuke to Israel that, though largely symbolic, reflected dwindling international patience with its military offensive in Gaza and its decades of occupation of Palestinian territories.

Scores of countries have recognized Palestinian statehood, but the closely coordinated announcements by the three nations carried added weight amid the growing toll of the war in Gaza, and because most Western European countries, and the United States, have resisted taking such a step out of solidarity with Israel.

The moves will likely have little immediate effect on conditions for Palestinians in the Israeli-occupied West Bank or in Gaza, where health authorities say that more than 35,000 people have been killed in over seven months of Israeli bombardment and ground combat. Prime Minister Benjamin Netanyahu of Israel called the moves “a prize for terrorism” and said that it would “not stop us from reaching a victory over Hamas.”

The White House flatly rejected unilateral recognition of Palestinian statehood, with National Security Council spokeswoman Adrienne Watson saying that President Biden “believes a Palestinian state should be realized through direct negotiations between the parties.”

But the announcements made clear the view in a growing number of capitals that Palestinian sovereignty cannot wait for a permanent peace deal with Israel, whose right-wing government largely opposes a Palestinian state.

“Palestinians have a fundamental, independent right to an independent state,” Jonas Gahr Store, the prime minister of Norway, said at a news conference in Oslo announcing the decision, which will go into effect on Tuesday.

Spain’s decision will take effect the same day, Prime Minister Pedro Sánchez said, adding that Spain had been forced to act because Mr. Netanyahu did not have a plan for long-term peace with the Palestinians.

“The two-state solution is in danger,” Mr. Sanchez said in remarks to Parliament, referring to a proposed framework for establishing an independent Palestinian state alongside Israel. “It’s time to move from words to action — to tell millions of innocent Palestinians who are suffering that we are with them, that there is hope,” he added.

Prime Minister Simon Harris of Ireland said at a news conference that he was confident that other countries would soon join them in recognizing Palestinian statehood.

Maya Sion-Tzidkiyahu, an expert on Israeli-European relations, said the announcements highlighted the erosion of the global support Israel saw immediately after the Hamas-led Oct. 7 attacks that touched off the war in Gaza.

“It proves again to us, as Israelis, the extent to which we are ever more isolated,” said Ms. Sion-Tzidkiyahu, an analyst at Mitvim, an Israeli foreign policy research group.

More than 140 countries and the Holy See have recognized a Palestinian state, but most Western European countries and the United States have not. The longstanding U.S. position is that recognition should be achieved through negotiations between Israelis and Palestinians, and that while it supports a two-state solution, unilateral measures by third parties will not advance that goal.

Israel strongly opposes international recognition of a Palestinian state — Mr. Netanyahu has called the establishment of such a state an “ existential danger ” — and maintains that Israel needs to negotiate directly with Palestinian leaders on a permanent solution.

But serious negotiations on a two-state solution haven’t been held for over a decade. And some observers argue that by not recognizing a Palestinian state, the West has enabled a far-right Israeli agenda opposed to its existence. It “gives leverage to Israel to keep encroaching on the land and resources and the people of the other state,” Husam Zomlot, the Palestinian envoy to Britain, said in a recent interview.

Palestinian leaders based in the West Bank welcomed the announcements. “We believe it will help preserve the two-state solution and give Palestinians hope that they will have their own state side by side with Israel in peace and security,” Ziad Abu Amr, a senior Palestinian official, said in an interview.

Wednesday’s announcements were the latest blow to Israel on the international stage, and came days after the International Criminal Court’s chief prosecutor requested arrest warrants for Mr. Netanyahu and Israel’s defense minister, along with leaders of Hamas, on war crimes charges stemming from the Oct. 7 attacks and the Israeli offensive in Gaza.

Spain, Ireland and Norway have all strongly criticized Israel’s conduct of the war and have historically been strong supporters of the Palestinians. Ireland’s support for Palestinians has deep roots ; in Spain, Mr. Sanchez has been a leading voice in Europe for the protection of Palestinian rights.

Norway has historically cast itself as a mediator between Israel and the Palestinians. In 1993, it hosted the clandestine meetings that led to the Oslo Accords, the framework that came close to resolving the conflict, but ultimately failed .

Prime Minister Store said Norway had acted with Spain and Ireland in an effort to salvage the possibility of a two-state solution in the face of an Israeli government that has openly rejected it.

Offering Palestinians who favor democracy and a sovereign Palestine alongside Israel, Mr. Store said in an interview, is an attempt to break what he described as “a downward spiral, with militant groups like Hamas setting the agenda on the Palestinian side” and the Israeli government “establishing hundreds of thousands of settlers” on occupied land.

He also said that the move sent “a clear message against Hamas,” he said, which is acting with terror and refusing to recognize Israel and a two-state solution.

“I wish to give credence and support to those parts of the Palestinian fabric who work for civilized principles of statehood,” Mr. Store said.

The announcements by Spain, Norway and Ireland and Wednesday do not, on their own, pose a major diplomatic problem for Israel, said Ms. Sion-Tzidkiyahu, the analyst. But the picture could change if more powerful states like Germany or France felt pressure to make similar declarations, she added.

“For now, we can live with it, because it does not have any real meaning,” she said. “It has no effect on the ground.”

Henrik Pryser Libell , Adam Rasgon , Victoria Kim , Michael D. Shear and Steven Erlanger contributed reporting.

— Emma Bubola and Aaron Boxerman

New footage is released of Hamas militants taking female soldiers hostage.

The families of several Israeli female soldiers taken hostage during the Hamas-led attack on Oct. 7 released video of their abduction in an attempt to pressure the Israeli government to revive apparently stalled cease-fire talks that could pave the way for the captives’ release.

Family members first saw the footage a few weeks ago via the Israeli military, which formally handed them a copy on Tuesday night, according to the Hostages and Missing Families Forum, which represents families of hostages held captive in Gaza.

“I’m asking you, please show this clip every day, open your broadcasts with it,” Eli Albag, whose daughter Liri Albag can be seen in the video , said in a television interview with Israel’s Channel 12. “Until somebody wakes up, the nation wakes up, and realizes that they’ve been abandoned there for 229 days.”

Some Israeli politicians immediately seized on the images to try to rebuff the decision by Ireland, Norway, and Spain to unilaterally recognize a Palestinian state . Israel Katz, the foreign minister, said he would screen the footage during a “severe reprimand” of the countries’ ambassadors.

In the three-minute edited collection of videos, which were verified by The New York Times, Palestinian fighters, some wearing Hamas headbands, can be seen binding the hands of five Israeli women who served as lookouts at Nahal Oz, a military base near the Gaza border. At least two of the hostages’ faces are bloodied, and they appear to be wearing pajamas. The militants repeatedly threaten the women.

One of the militants calls the women “dogs,” vowing to crush them. One of the women can be heard telling the militants that she had “a friend in Palestine,” even as another begs to know if any of them speak English.

In a statement, Hamas said that the scenes presented in the edited video “could not be confirmed.” The group also claimed that a translation provided by the Israeli authorities was incorrect and included phrases “that were not said by any of the fighters who appeared in the video.”

Talks to secure the release of the more than 125 hostages still being held in Gaza have been at a standstill since Israel began its assault on the southern city of Rafah in early May. Israeli forces operating in northern Gaza retrieved the bodies of four Israelis abducted on Oct. 7, heightening fears for the remaining captives.

The Hostages and Missing Families Forum identified the Israeli hostage soldiers in the video as Naama Levy, Agam Berger, Liri Albag, Karina Ariev and Daniela Gilboa, all aged 19 or 20. The footage was recorded by body cameras worn by the Hamas militants who abducted them, the organization said.

Families of hostages met with senior Israeli leaders on Wednesday, including Yoav Gallant, the defense minister, and Benny Gantz, a member of the country’s war cabinet, in an attempt to lobby for an immediate agreement with Hamas.

“The video is a damning testament to the nation’s failure to bring home the hostages, who have been forsaken for 229 days,” the Hostages and Missing Families Forum said in a statement.

In a statement on social media, Mr. Gantz said he was appalled by the footage of the five hostages’ abduction, and vowed to make “difficult decisions” if necessary in order to bring home the remaining captives in Gaza.

Yair Lapid, the leader of Israel’s parliamentary opposition, said the video was “a reminder to the world of the evil we are fighting in Gaza.”

Dmitriy Khavin , Alexander Cardia and Riley Mellen contributed reporting.

— Aaron Boxerman reporting from Jerusalem

news analysis

The war is creating a widening divide between Europe and Israel.

In Europe, long a vital source of support for Israel, the political center of gravity is moving away from Prime Minister Benjamin Netanyahu’s government.

Spain, Ireland and Norway on Wednesday recognized Palestinian statehood, despite vehement Israeli and American opposition. And most European governments offered unequivocal support to the International Criminal Court this week, after it requested arrest warrants for Israel’s prime minister and defense minister, along with leaders of Hamas.

Israel still has staunch allies within the European Union, especially Hungary and the Czech Republic, and key players like Germany, despite growing discomfort with Israel’s conduct, have not shown any inclination to alter their stance. The growing fissures within Europe mean that the consensus-driven European Union will not change its positions any time soon.

But European countries face rising international and domestic pressure to take a firmer stand against Israel’s handling of the Palestinian territories, and particularly the devastating war in Gaza.

Among European Union members, Sweden has for a decade stood alone in recognizing Palestinian statehood. Europe has long supported the eventual creation of a Palestinian state — the “two-state solution” that Israel’s government steadfastly opposes — and voiced frustration with Israel’s handling of the Gaza Strip and the occupied West Bank, but most nations have been unwilling to go further.

Instead, the European Union, before the war, was moving closer to Israel, including through financially and politically important partnerships in trade and science.

The war, and the way it has evolved, are changing that. The sympathetic views that sustained European support for Israel after the Oct. 7 attacks is waning as the war continues, the humanitarian situation in Gaza worsens, and Israel looks to many people less like a victim and more like an aggressor.

Ireland and Spain, E.U. members, and Norway, a nation closely aligned with the bloc, took the next step on Wednesday, recognizing Palestinian statehood — a sharp rebuke to Israel, even if it has little practical effect and came as little surprise. The three European countries have been vocal in their criticism of Israel and support of the Palestinian cause, even as they have condemned Hamas and the brutal assault it led against Israel on Oct. 7.

If more of their neighbors follow their lead, the European Union could become a major counterweight to the American position that Palestinian statehood should result only from a negotiated settlement with Israel. That would deepen the rift between Europe and Israel.

There have been warnings and concerns, from Europe and other parts of the world, about Israel’s deadly and destructive campaign against Hamas in Gaza. Particular attention now turns to Belgium, another deeply pro-Palestinian E.U. country that has stepped up its criticism of how Israel is handling the war.

“We certainly have seen a growing chorus of voices, including voices that had previously been in support of Israel, drift in another direction,” Jake Sullivan, President Biden’s national security adviser, said at a news conference. “That is of concern to us because we do not believe that contributes to Israel’s long-term security or vitality.”

The European Union as a bloc has maintained its trade and other agreements with Israel, despite growing calls to sever or drastically limit them.

A majority of the 27 E.U. countries have held largely similar positions on the Israel-Hamas war since Oct. 7 and have undergone similar shifts.

They began with revulsion at the Hamas-led attack that killed an estimated 1,200 people and captured more than 240 hostages, support for Israel’s right to defend itself and continued hope for a two-state solution. They called for restraint by Israel as it bombarded, blockaded and invaded Gaza. Then came outright, increasingly sharp criticism of an Israeli campaign that has killed about 35,000 people — combatants and civilians — so far, forced most Gazans to flee their homes, caused shortages of food and medicines and leveled many of the territory’s buildings.

In standing by Israel, countries like Hungary and the Czech Republic may play a decisive role in determining what the European Union can and — especially — what it cannot do when it comes to the Middle East. Austria, too, has remained close to Israel while others have criticized it.

Foreign policy is a national prerogative jealously guarded by E.U. members that cede many other powers to the bloc. The group’s positions in international affairs can be reached only by unanimous consensus, making it unlikely that it will take a clear position on Israel and Palestine any time soon.

When the International Criminal Court’s prosecutor on Monday requested arrest warrants for Prime Minister Benjamin Netanyahu and Defense Minister Yoav Gallant of Israel, most European countries, and the E.U. itself, stopped short of taking an overt position on the move, but said that they respected the court’s independence.

But the Czech prime minister, Petr Fiala, said on social media that seeking the arrest of “the representatives of a democratically elected government together with the leaders of an Islamist terrorist organization is appalling and completely unacceptable.”

Prime Minister Viktor Orban of Hungary called it “absurd and shameful.”

But Belgium’s foreign minister, Hadja Lahbib, said , “Crimes committed in Gaza must be prosecuted at the highest level, regardless of the perpetrators.”

The Foreign Ministry of France, the bloc’s second-largest nation, said , “France supports the International Criminal Court, its independence and the fight against impunity in all situations.”

Recognizing a Palestinian state is “not taboo” for France but the right moment has not yet come, the French foreign minister said on Wednesday after several European countries officially took the step. “This decision must be useful,” Stéphane Séjourné, the foreign minister, said in a statement.

Though France has refrained so far from acting on its own, last month it voted in favor of a U.N. Security Council resolution to recognize Palestine as a full member state of the United Nations. Britain, no longer in the European Union but still influential, abstained from that vote.

The United States, France and Britain are all permanent Security Council members, with the power to veto any action there. Only the United States used that power, demonstrating the widening divide with Europe.

The evolution of Germany’s stance will play an important role in determining the direction of E.U. relations with Israel. Germany is the bloc’s biggest member and has long expressed a unique commitment to Israel as a result of its Nazi history and the Holocaust.

Berlin started on the pro-Israel end of the E.U. spectrum in the immediate aftermath of Oct. 7, but now it more openly criticizes the way Israel is conducting the war, and it has called for an immediate cease-fire, in opposition to Israel and the United States.

At a news conference in Berlin, Kathrin Deschauer, a spokeswoman for the German Foreign Ministry, did not signal any change in her country’s stand when asked about the Spanish, Irish and Norwegian recognition of Palestine.

“An independent state of Palestine remains a firm goal of German foreign policy,” she said. It is an urgent matter, she added, but must come at the end of a “process of dialogue.”

Aurelien Breeden contributed reporting from Paris, and Christopher F. Schuetze from Berlin.

— Matina Stevis-Gridneff reporting from Brussels

What does it mean to recognize a Palestinian state?

The decision by three European countries — Ireland, Norway and Spain — to recognize a Palestinian state fits into a long-term goal of Palestinian leaders to secure diplomatic acceptance, but it appears that the immediate practical impact will be limited.

Broadly speaking, recognizing a state means declaring that it meets the conditions of statehood under international law. It typically opens a path to setting up diplomatic relations and an embassy there. But the European countries appeared to be mostly concerned with expressing support for Palestinians and sending a message to Israel at a time of deepening international concern about its conduct of the war.

The foreign minister of Norway, Espen Barth Eide, told a news conference that the country’s representative office to the Palestinian Authority, which was opened in the West Bank in 1999, would become an embassy. He gave no date for this change but said it would enable Norway to enter into bilateral agreements.

Recognition would also have some “domestic legal effects in Norway in areas where issues related to the state of Palestine arise,” he said.

Statements by the leaders of Ireland and Spain focused on the need for peace in Gaza and the importance of a two-state solution, but did not mention embassies or other immediate changes.

“Recognition of Palestine is not the end of a process, it is the beginning,” said Simon Harris , the taoiseach, or prime minister, of Ireland. He said that Ireland was recognizing the right of a Palestinian state to exist in peace and security within internationally agreed borders, and said that to do so sent a message “that there is a viable alternative to the nihilism of Hamas.”

Mr. Harris said he would travel to Brussels on Sunday to meet more than 40 partners from the Middle East, Europe and elsewhere “to discuss how recognition can make a concrete, practical impact to ending this horrible conflict and implementing a two-state solution.”

To date, around 140 countries, mainly outside Western Europe, have recognized a Palestinian state, according to the Palestinian Authority’s website. These do not include the United States, Israel’s most significant ally, or Britain, France or Germany.

The announcements on Wednesday fit into a broader Palestinian drive for diplomatic recognition , though the advances so far have had little immediate impact on the lives of people in the West Bank and Gaza.

The United Nations voted in 1947 to create an independent Arab state alongside a Jewish one, but the plan was rejected by neighboring Arab governments and Palestinian Arabs, and the state of Israel was founded amid a war the following year. In the decades since, plans for a two-state solution have repeatedly been stymied.

This month, the U.N. General Assembly overwhelmingly adopted a resolution declaring that Palestinians qualify for full membership status at the United Nations. The Assembly can only grant full membership with the approval of the Security Council, and the United States would almost inevitably wield its veto power to kill such a measure , as it did last month.

Even though a majority in the General Assembly supports Palestinian statehood, the resolution was the first time the body had voted on the issue of full membership, reflecting solidarity with Palestinians that appears to have deepened in some nations as a result of the war in Gaza.

Palestine became a member of UNESCO, the United Nations cultural organization, in 2011, but a bid for full U.N. membership failed. The next year, Palestine was granted the lesser status of observer at the United Nations, a level shared by the Holy See.

Observers can participate in U.N. General Assembly sessions but are not allowed to vote. They also can join the International Court of Justice, which is currently hearing a case on the legality of Israel’s occupation of Palestinian territories.

The prosecutor of the International Criminal Court, Karim Khan, on Monday requested arrest warrants for Prime Minister Benjamin Netanyahu of Israel and Hamas leaders on charges of war crimes and crimes against humanity. Israel does not recognize the court, but Palestine has been a member of the court since 2015.

Palestine is also party to a number of treaties, and became a member of the Organization for the Prohibition of Chemical Weapons in 2018 .

Henrik Pryser Libell contributed reporting.

— Matthew Mpoke Bigg

Israel’s finance minister says he will withhold tax revenues from the Palestinian Authority.

Israel will not transfer much-needed funds to the Palestinian Authority in the wake of the decision by three European countries to recognize a Palestinian state, the country’s finance minister said on Wednesday, as its foreign minister denounced the European moves as giving “a gold medal to Hamas terrorists.”

The decision by the finance minister, Bezalel Smotrich, a far-right leader who opposes Palestinian sovereignty, threatened to push the Palestinian government into a deeper fiscal crisis. He said in a statement that he had informed Prime Minister Benjamin Netanyahu that he would no longer send tax revenues to the authority, which administers parts of the Israeli-occupied West Bank in close cooperation with Israel.

Mr. Smotrich’s office signaled that the decision was at least partly a response to Spain, Norway and Ireland recognizing Palestinian statehood, and that the Palestinian leadership bore responsibility for campaigning for the move.

“They are acting against Israel legally, diplomatically and for unilateral recognition,” said Eytan Fuld, a spokesman for Mr. Smotrich, referring to the authority. “When they act against the state of Israel, there must be a response.”

The Israeli move drew a rebuke from the White House, but no threat of action in response.

“I think it’s wrong on a strategic basis, because withholding funds destabilizes the West Bank. It undermines the search for security and prosperity for the Palestinian people, which is in Israel’s interests,” Jake Sullivan, President Biden’s national security adviser, said at a news conference. “And I think it’s wrong to withhold funds that provide basic goods and services to innocent people.”

Mohammad Mustafa, the recently inaugurated Palestinian Authority prime minister , warned that the dire fiscal situation was contributing to a “very serious moment” in the West Bank, which has faced increasing unrest since the Hamas-led Oct. 7 attacks on Israel.

He said that he was set to meet top diplomats from countries that have traditionally provided funding for the authority next week in Brussels. “We go through an extremely difficult time trying to deliver services to our people on the ground, and they’re already under military action,” Mr. Mustafa said in a video distributed by his office. “And on top of that, we cannot pay them to do the basic things. This is war.”

Israel also recalled its ambassadors from Spain, Ireland and Norway for consultations on Wednesday morning. Israel Katz, the Israeli foreign minister, said he had summoned the countries’ envoys to Israel for a “severe scolding” following “their governments’ decision to award a gold medal to Hamas terrorists.”

Mr. Netanyahu’s office did not respond to a request for comment on Mr. Smotrich’s statement.

Under decades-old agreements, Israel collects customs and import taxes on behalf of the Palestinian Authority. Those revenues constitute most of the Palestinian budget, particularly as international aid has declined. But Mr. Smotrich — who has labeled the Palestinian Authority “an enemy” — had already delayed transferring the latest tranche of funds before the announcements on Wednesday, said Mr. Fuld and a Palestinian official. The Palestinian official spoke on condition of anonymity because they were not authorized to discuss the matter publicly.

The Ramallah-based Palestinian Authority is already in a severe financial crisis following tightened Israeli restrictions on its funding and a depressed West Bank economy stemming from the war. This month, it managed to pay only 50 percent of the salaries of tens of thousands of civil servants.

Diplomats and analysts have warned that the Palestinian government’s deepening financial problems could lead to even more unrest in the West Bank. More than 500 Palestinians have been killed in the territory, many in clashes with Israeli forces, since the Hamas-led attack on Oct. 7 prompted Israel to go to war in Gaza, according to the Palestinian Authority Health Ministry.

Palestinians have faced tightening Israeli restrictions since Oct. 7. Over 100,000 Palestinians who worked in Israel were barred from entering, creating mass unemployment overnight. Near-nightly raids, Israeli road closures, and stricter checkpoints have further choked the Palestinian economy.

The Palestinian Authority traditionally disburses some of the tax funds collected by Israel to Gaza. After the war broke out in October, Mr. Smotrich said he would withhold that part from the amount it transfers to the authority. Palestinian officials refused to accept the reduced payments at all in protest.

After a monthslong standoff over the issue, Israeli and Palestinian leaders agreed to a deal stipulating that Norway would hold some of the revenues in trust until Israel agreed they could be sent to the Palestinians. The Palestinians agreed to receive the reduced payments in the meantime.

On Wednesday, Mr. Smotrich called for the government to immediately annul that agreement as well.

Top Israeli officials, including Mr. Netanyahu, have repeatedly excoriated international recognition of a Palestinian state as a “prize for terrorism” after the Oct. 7 attack.

Most of the current hard-line Israeli government rejects the establishment of an independent Palestinian state, practically ruling out peace talks to end Israel’s decades-long occupation.

President Biden and Secretary of State Antony J. Blinken have said that after the war , Gaza should be unified with the West Bank under a “revitalized” Palestinian Authority . Israel has remained vehemently opposed to that idea. The authority in its current form is also unpopular among Palestinians, who view it as complicit in Israel’s occupation.

Yair Lapid, the leader of Israel’s parliamentary opposition, said he agreed with Mr. Netanyahu that the three countries’ decisions were “disgraceful.” But he also called it “an unprecedented diplomatic failure” for Israel in a statement on social media, an implicit reproach of Mr. Netanyahu.

Health officials report that the death toll has risen to eight in Israel’s raid of Jenin in the West Bank.

Israeli forces extended a military raid into a Palestinian city in the occupied West Bank into a second day, and Palestinian officials said at least eight civilians, including two high school students, a doctor and a teacher, had been killed so far.

Dozens have also been injured since the Israeli military entered the Palestinian town of Jenin on Tuesday morning, in the latest of a series of raids that Israeli officials have described as counterterrorism operations. Israel’s forces have trapped residents in their homes, torn up roads with heavy machinery and tanks, and destroyed vehicles in the streets, according to residents, local officials and the health ministry.

“No one can leave their homes; the military’s snipers are spread out over the roofs of the homes they took over, preventing anyone from moving in the streets,” said Nidal Naghnaghieh, a resident of Jenin.

Israel has increased its West Bank incursions in the wake of the Oct. 7 Hamas-led attack on Israel, carrying out near-nightly military raids into Palestinian cities and neighborhoods. More than 500 Palestinians have been killed, according to health officials.

Many of the raids have been in Jenin camp, a more than 70-year-old refugee community within the larger city of Jenin that is populated mainly by Palestinian refugees and their descendants who were expelled or fled from their homes in present-day Israel during the war that surrounded the creation of the state of Israel.

Jenin has long been known as a bastion of armed resistance to the Israeli occupation and was the target of frequent military raids even before the war in Gaza.

The Israeli military did not respond to questions about the raid.

“The situation in the camp for the second day of their raid is really difficult, they have blown up several homes,” said Mr. Naghnaghieh, who was outside when the raid began and has not been able to return home for two days. His family is stuck inside their home, he said.

Many men and boys in the camp have been detained by the Israeli forces, he said.

The Palestinian Red Crescent Society said Israeli forces shot at one of their ambulances on Tuesday while it was trying to rescue the wounded, but it gave little detail.

“There are martyrs and people don’t know the fate of those who have been wounded,” said Mohammad Al-Sayid, a member of the Jenin city council.

— Raja Abdulrahim reporting from Jerusalem

Norway’s recognition carries significance because of its role in 1993 talks.

Scores of countries have recognized a Palestinian state, but Norway’s announcement on Wednesday that it would do so carried added significance because it hosted the clandestine meetings in 1993 that led to the Oslo Accords, the framework for peace that came close to resolving the conflict between Israel and the Palestinians. It ultimately failed .

Norway calls itself a friend of Israel, and the two countries have a longstanding relationship. But since Oct. 7, when Israel launched a military offensive in Gaza in response to Hamas-led attacks, Norway has also sharply condemned Israel’s conduct of the war.

Norway’s foreign minister said in March that “Israel’s use of military force is having a disproportionately severe impact on the civilian population and is not in line with international humanitarian law,” and called for a cease-fire.

Norway also continued to fund UNRWA, the main U.N. agency that helps Palestinian refugees, after several other countries stopped doing so following Israel’s allegations that about a dozen of the agency’s employees had been involved in the Oct. 7 attacks.

In February, Norway testified at the International Court of Justice , stating that Israeli settlements in the occupied West Bank and East Jerusalem were among the biggest obstacles to peace in the region.

The Oslo Accords were landmark agreements that included mutual recognition between the government of Israel and the Palestinian leadership, which was able to return to the occupied territories from exile. The accords also established the Palestinian Authority, which was meant to be an interim body exercising limited Palestinian self-rule in the West Bank and Gaza Strip.

In 2000, continued negotiations toward a permanent peace treaty to establish an independent Palestinian state alongside an Israeli one dissolved into a second Palestinian uprising and an Israeli military clampdown.

Jonas Gahr Store, the prime minister of Norway, said on Wednesday that “a recognition of Palestine is support to moderate forces that are on the defensive, in a long and gruesome conflict.”

He called the recognition “an investment in the only solution that can give lasting peace in the Middle East,” and he urged other countries to follow suit “so that the process towards a two-state solution finally can begin again.”

— Emma Bubola

In recognizing a Palestinian state, Ireland nods to its own history.

When the Irish government on Wednesday announced formal recognition of an independent Palestinian state, it drew on its own struggle for statehood and the violence that surrounded it.

“From our own history we know what it means: recognition is an act of powerful political and symbolic value,” Simon Harris, the taoiseach, or prime minister of Ireland, said at a news briefing.

Mr. Harris was nodding to the Republic of Ireland’s quest for self-rule in the early part of the 20th century after hundreds of years of British rule. He detailed how, on Jan. 21, 1919, Ireland asked the world to recognize its right to independence.

“Our message to the free nations of the world was a plea for international recognition of our independence, emphasizing our distinct national identity, our historical struggle and our right to self-determination and justice,” he said. “Today we use the same language to support the recognition of Palestine as a state.”

Ireland condemned Hamas after the group led the Oct. 7 attack on Israel that officials there say killed some 1,200 people. And since the start of the conflict in Gaza, it has sharply rebuked Israel for its assault that Gazan authorities say has left more than 35,000 people dead.

Mr. Harris emphasized that Ireland’s announcement, which came on the same day as similar moves by Spain and Norway , did not diminish his country’s relationship with Israel. Instead, he said, it was an acknowledgment that Israel and a state of Palestine had an equal right to exist.

“I want to know in years to come that Ireland spoke up, spoke out, in favor of peace,” he added.

The Republic of Ireland has a deep history of support for Palestinians and for their efforts to establish an independent state, and the announcement on Wednesday drew support from across the political spectrum and from within the country’s coalition government.

The small island of Ireland — which is made up of the independent Republic of Ireland and Northern Ireland, which remained part of the United Kingdom — also experienced its own seemingly intractable sectarian conflict between mostly Catholic nationalists who supported independence and mostly Protestant unionists who supported alignment with Britain.

That conflict, which was marked by thousands of lives lost in terrorist bombings, shootings and clashes with the military and police over decades that came to be known as The Troubles, came to a close with the Good Friday agreement in 1998.

“Ireland has for many decades recognized the State of Israel and its right to exist in peace and security,” Mr. Harris said. “We had hoped to recognize Palestine as part of a two-state peace deal, but instead we recognize Palestine to keep the hope of that two-state solution alive.”

Mr. Harris also drew on Ireland’s history when he made a distinction between Hamas terrorism and the broader Palestinian population.

Asked whether recognition of Palestinian statehood would empower Hamas, Mr. Harris said: “Hamas is not the Palestinian people, and here in Ireland, better than most countries in the world, we know what it’s like when a terrorist organization seeks to hijack your identity and seeks to speak for you.”

It was a clear reference to the deadly terror attacks carried out decades ago by paramilitary groups across the islands of Ireland and Britain, often in the name of Irish independence.

“Palestine is made up of people, decent people. So is Israel,” he said, adding: “I think right-thinking people around the world are able to differentiate between the actions of terrorists and the decent people of a state.”

— Megan Specia

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Undeveloped Labor Markets

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