Unemployment almost double pre-crash levels

The world’s major economies have seen a startling rise in the number of long-term unemployed since the financial crash in 2008.

The Organisation for Economic Cooperation and Development (OECD) has compiled employment data from its 34 member countries as part of its latest employment monitor report. The figures showed that over 16m people had been jobless for a year or more in the first quarter of 2014, compared to 8.7m people at the start of the crisis.

Today, more than one third of all the unemployed in the OECD’s member countries have been out of work for over a year.

The most notable increases in unemployment were seen in southern Europe, which are thought to have led to a rise in structural unemployment and thus will not be overcome by economic growth.

The OECD commented: “Tackling unemployment where it remains high and driving down long-term unemployment remain key policy priorities.”

It suggested that policymakers “should prioritize efforts on helping the long-term unemployed back to work through more personalized job-search assistance and training programs.”

Edward P. Lazear discusses how policymakers can combat persistent structural unemployment after recessions. He says that most of the unemployment during the recession appeared to be caused by cyclic causes, and so could be addressed with monetary policy. However, if structural factors are keeping unemployment levels high, more detailed analysis is required to develop more targeted policies.

Read more here.

Related articles:
Structural or cyclic? Labor markets in recessions, by Edward P. Lazear
Employment protection, by Stefano Scarpetta
Unemployment benefits and unemployment, by Robert Moffitt
Recruiting intensity, by R. Jason Faberman