Unemployment

Unemployment is widely regarded as a major social and economic global problem. When referring to someone as unemployed, most people have in mind a state consistent with the International Labour Office's (ILO) definition, namely a person who does not have a job, is available for work, and is actively looking for work (ILO 1998). This is certainly the case for government agencies, like the Bureau of Labor Statistics in the United States, that publish unemployment statistics. These statistics are used in a variety of situations, but mostly as an indication of the underuse of a nation's resources, and to inform on the economic and social hardship associated with the absence of employment. The data listed in Table 1 show that unemployment rates are high for most countries. These high unemployment rates have been extensively studied. See, for example, Richard Jackman (1997a) for OECD countries, Richard Jackman (1997b) for Central and Eastern Europe, Albert Berry, Maria Mendex, and Jaime Tenjo (1997) for Latin America, and Anh Le and Paul Miller (2000) for Australia. The findings from this research indicate that the unemployment experience is now very well documented.

Most of the people who become unemployed remain without work for very short periods. However, there is also a hard core of unemployed who remain without work for long periods of time. The adverse consequences of unemployment are much more acute for this group.