Unemployment in the EU and the US Impact of the crisis on unemployment has so far been less pronounced in the EU than in the US

STAT/10/67

11 May 2010

Unemployment in the EU and the US

Impact of the crisis on unemployment has so far been less pronounced in the EU than in the US

The unemployment rate in the EU27 has grown since the first quarter of 2008 as a result of the economic crisis. However, the increase has been smaller than in the US, where the rate has overtaken the EU27 despite having been much lower at the start of the crisis. On a more detailed level, similar patterns in the evolution of unemployment by gender and educational level during the crisis can be observed in the EU27 and the US. Long term unemployment is higher in the EU27, but rising fast in the US.

In the first quarter of 2010, the seasonally adjusted unemployment rate in the EU27 was 9.6%, just below the rate in the US which stood at 9.7%. US unemployment before the crisis was at its lowest level in the second quarter of 2007 at 4.5% and peaked in the fourth quarter of 2009 at 10.0%. In the EU27, unemployment started to rise in the first quarter of 2008, when it stood at 6.7%. Since then, the unemployment rate has increased to reach 9.6% in the first quarter of 2010. While the rate continued to rise in the EU27 in the first quarter of 2010, it decreased in the US.

These data1 come from a publication2 issued by Eurostat, the statistical office of the European Union, on the impact of the economic crisis on EU27 and US unemployment.

Unemployment rates in the EU27 and the US

seasonally adjusted

In both EU27 and US, men more affected by unemployment than women,…

In the EU27, the unemployment rate was 9.8% for men in the first quarter of 20103 compared with 9.3% for women. For the first time since the beginning of the series in 2000, the unemployment rate for men overtook the rate for women in May 2009. In the US, the unemployment rate was 10.7% for men in the first quarter of 2010 compared with 8.5% for women. As in the EU27, the unemployment rate for men in the US rose more quickly during the crisis than for women. Between the third quarter of 2007 and the fourth quarter of 2009, the unemployment rate for men rose by 2.9 percentage points (pp) in the EU27 and by 6.5 pp in the US. The increases for women in the same period, 1.5 pp in the EU27 and 4.1 pp in the US, were smaller.

Unemployment rates in the EU27 and the US by gender

seasonally adjusted

…high education reduces risks of unemployment…

In the EU27 and in the US, unemployment rates rose most strongly in absolute terms for those with the lowest level of education4. In the EU27, the rate increased by 4.3 percentage points between the fourth quarters of 2007 and 2009 for those with less than upper secondary education, while it rose by 1.4 pp for those with tertiary level education. In the US over the same period the rate rose by 7.7 pp for those with less than upper secondary education, and by 3.9 pp for those with tertiary level education.

Unemployment rates in the EU27 and the US by educational level (25 and older)

…and long term unemployment rises

In both the EU27 and the US, long term unemployment5 rose more than short term unemployment. However, long term unemployment was relatively high in the EU27 before the crisis, while it was low in the US.

In the EU27, the rate for short term unemployment (less than one month) increased by 0.1 percentage points between the fourth quarters of 2007 and 2009, while the long term unemployment rate (6 months and longer) grew by 1.3 pp. In the US, the rate for short term unemployment rose by 0.2 pp between the fourth quarters of 2007 and 2009, while the long term unemployment rate gained 2.9 pp.

Unemployment rates in the EU27 and the US by duration

• In this News Release quarterly seasonally adjusted data for unemployment and unemployment rates have been used. Monthly series with data up until March 2010 are available for unemployment broken down by age and sex on the Eurostat website.

Eurostat produces harmonised unemployment rates for individual EU Member States, the euro area and the EU. These unemployment rates are based on the definition recommended by the International Labour Organisation (ILO). The measurement is based on a harmonised source, the European Union Labour Force Survey (LFS). Eurostat defines unemployed persons as persons aged 15 to 74 who are without work, are available to start work within the next two weeks and have actively sought employment at some time during the previous four weeks.

The figures for the US are taken from the Bureau of Labor Statistics. Based on the US Current Population Survey they count as unemployed those aged 16 or older who are without work, who are available to work and who have actively sought employment at some time during the previous four weeks.

The unemployment rate is the number of people unemployed as a percentage of the labour force. The labour force is the total number of people employed plus unemployed.

• Eurostat, Statistics in Focus, 20/2010 "Impact of the crisis on unemployment so far less pronounced in the EU than in the US", available free of charge in pdf format on the Eurostat website.

• Data for totals and by gender refer to averages of monthly unemployment series benchmarked against quarterly results from the LFS. For 2010Q1 data from the LFS is not yet available; thus, rates for 2010Q1 are based entirely on monthly unemployment series.

• Unemployment rates by educational attainment in this News Release are restricted to individuals aged 25 and more in order to exclude individuals still in education. The different educational levels have been classified according to the ISCED (International Standard Classification of Education): Less than upper secondary level = ISCED 0-2; upper secondary level = ISCED 3-4; tertiary level = ISCED 5-6.

• The definitions of unemployment duration differ from the ones generally used by Eurostat in order to allow a comparison with the

• United States. For the EU27 and all Member States, short term unemployment refers to a duration of unemployment of less than 1 month, medium term unemployment to 1-6 months, and long term unemployment to 6 months and more. For the US, short term unemployment refers to a duration of up to 5 weeks, medium term unemployment to 5-26 weeks and long term unemployment to 27 weeks or more. In all cases, unemployment is still ongoing at the time of the reference week.

Unemployment rates in the EU27 and the US by gender

seasonally adjusted

: Data not available

Unemployment rates in the EU27 and the US by educational level (25 years and older)

: Data not available

u Data with reduced reliability due to small sample size

Unemployment rates in the EU27 and the US by duration

: Data not available

u Data with reduced reliability due to small sample size

* Eurostat estimates