International Unemployment Rates: How Comparable Are They?

Abstract

Comparative unemployment rates are used frequently in international analyses of labor markets and are cited often in the press. In the United States, the comparative levels are considered to be an important measure of U.S. economic performance relative to that of other developed countries. Comparative unemployment rates also provide a springboard for investigating the economic, institutional, and social factors that influence cross-country differences in joblessness. The Bureau of Labor Statistics (BLS, the Bureau) has adjusted foreign unemployment rates to U.S. concepts since the early 1960s. Three other organizations—the Organization for Economic Cooperation and Development (OECD), the International Labor Office (ILO), and the Statistical Office of the European Communities (Eurostat)—also adjust national data on unemployment to a common conceptual basis. The resulting “standardized” or “harmonized” rates are intended to provide a better basis for international comparison than the national figures on unemployment offer. The standardized rates, as currently published by the three organizations that make comparisons outside of Europe (BLS, OECD, and ILO), all show a similar result: a significant gap in unemployment rates between the United States, on the one hand, and Canada and Europe, on the other. In 1998, for example, when International unemployment rates: how comparable are they?