Unemployment Rates: The Highest and Lowest in the World

Global economies recover unevenly from the COVID-19 pandemic

The highest and lowest unemployment rates in the world vary dramatically, even among the Earth's largest economies.

Unemployment in the United States, the largest economy in terms of gross domestic product (GDP), was at 3.5% by the end of February 2020—the lowest rate in half a century—but quickly rose to 14.7% by April in the wake of the COVID-19 pandemic and its economic impact. By way of comparison, our historical research shows that the average U.S. annual unemployment rate from 1949 through 2019 was 5.8%.

The Congressional Budget Office originally expected the unemployment rate to peak at over 14% in the third quarter of 2020 and to quickly improve after that. Although it was right about the peak, the U.S. economy recovered much faster than predicted, with the unemployment rate having continued to decrease each month since the start of the pandemic—barring 0.1% increases from May to June 2021 and December 2021 to January 2022. As of June 2022, the unemployment rate sits at 3.6%.

However, the economic recovery hasn't been felt equally by all countries, with several nations having unemployment rates just as bad, if not worse than they were before the pandemic began. Below are the countries with the highest and lowest unemployment rates, in addition to the unemployment rates of the world's largest economies by GDP, according to the most recently available data from the World Bank.

Key Takeaways

  • Unemployment typically measures individuals in the labor force, those that are not working but are actively seeking work.
  • The countries that have the lowest unemployment rates are Qatar, Cambodia, and Niger.
  • Just because a country has a low unemployment rate, does not mean its citizens are necessarily well-off. That is determined by GDP per capita.
  • The countries with the highest unemployment rates include South Africa, Djibouti, and Eswatini.

Highest Unemployment Rates

The world's top five highest unemployment rates at the end of 2021 were in Africa and occupied Palestine.

  • South Africa: 33.6%
  • Djibouti: 28.4%
  • Eswatini: 25.8%
  • West Bank and Gaza: 24.9%
  • Botswana: 24.7%

South Africa had one of the highest unemployment rates in the world in 2021. It's also the second-richest country in this grouping. The World Bank estimated its gross domestic product (GDP) per capita to be $6,994.2 in 2021.

Djibouti benefits from its location on the Red Sea, making it a bridge between Africa and the Middle East. Djibouti was less affected by the pandemic than other countries due to "buoyant free zone re-exports and exports of transportation, logistics, and telecommunication services to and from Ethiopia in 2020 Q3 and Q4." Its outlook is positive but that is dependent on how Ethiopia fairs.

The Palestinian territories of the West Bank and Gaza are currently facing an unsustainable economic situation. The Palestinian economy has continued to feel the impact of both the economic fallout of the COVID-19 outbreak and a political standoff that made it difficult for the Palestinian Authority to collect tax revenue in 2020. In addition, in 2021, Gaza saw further armed conflict with Israel, damaging economic prospects.

Eswatini suffers from extreme poverty and the world's highest HIV/AIDS prevalence rate, according to the CIA. HIV/AIDS tends to cause a substantial decline in productivity as households lose manpower to the disease.

In 2021, Botswana witnessed an economic rebound of 12.1% with strong growth expected at 4.1% after the impact of the pandemic fades.

Part-time workers are counted as employed, and these figures don't count people who give up looking for work for an extended period of time.

Lowest Unemployment Rates

Below are the world's 10 lowest unemployment rates at the end of 2021:

  • Qatar: 0.3%
  • Cambodia: 0.6%
  • Niger: 0.8%
  • Solomon Islands: 1.0%
  • Lao PDR: 1.3%
  • Thailand: 1.4%
  • Benin: 1.6%
  • Rwanda: 1.6%
  • Burundi: 1.8%
  • Bahrain: 1.9%

The above countries have stunning unemployment rates and all bested the U.S. by a considerable margin at the end of 2021.

Unemployment Rates for the World's Largest Economies

The unemployment rates for the top 10 largest economies by GDP were predictably low at the end of 2021, with some outliers like France and Italy.

  • United States: 3.9%
  • China: 4.8%
  • Japan: 2.8%
  • Germany: 3.5%
  • United Kingdom: 4.5%
  • India: 6.0%
  • France: 8.1%
  • Italy: 9.8%
  • Canada: 7.5%
  • Korea, Republic: 3.5%

As the world has begun to open up after the pandemic, these figures should improve over time; however, much of the world is still negatively impacted by the pandemic, its impact on the global supply chain, and the war in Ukraine that began in February 2022.

10 million

The number of people in the U.S. who lost their jobs within a two-week period at the end of March in 2020, according to the Department of Labor.

Unemployment Rates and Economic Strength

Having a low unemployment rate does not mean a country's economy is particularly strong. For instance, Niger had only 0.8% unemployment in 2021, but its GDP per capita was $594.9 in 2021, according to the World Bank. Burundi had 1.8% unemployment in 2021 but a GDP per capita of $236.8 in 2021.

These countries have low unemployment figures in large part because their economies rely heavily on agriculture, which is labor-intensive but seasonal. Remember that the underemployed are still counted in employment figures. Even Laos, with a relatively healthy GDP per capita of $2,551.3 in 2021, still employed 61% of its workforce in agriculture in 2019.

Unemployment Parallel With a Rich Economy

Of course, it's possible to have both low unemployment and a rich economy. This combination is seen in Qatar. According to the World Bank, GDP per capita in Qatar was $61,276 in 2021. That wealth helps its standing in the above listing, as a country's unemployment rate only factors in those actively looking for work. The working-age child of rich parents may feel less pressure to earn money and be more inclined to spend it.

Qatar's economy is driven by oil and natural gas, hence its extreme wealth, though it's been making a sustained push to diversify into financial services, construction, restaurants, and hotels.

What Is the Global Unemployment Rate?

The International Labor Organization forecasts the global unemployment rate for 2022 to be 5.9%. This is lower than the 6.6% and 6.2% rates witnessed in 2020 and 2021, respectively, but remains above 2019's rate of 5.4%. Unemployment rates are closest to their pre-pandemic levels in high-income countries like the U.S., the U.K., and Canada, where unemployment is at or near historic lows.

What Is Not Included in the Unemployment Rate?

The unemployment rate only takes into consideration the labor force. The labor force consists of those individuals that are currently working and those that are not working but who are looking for work. If an individual has not been looking for work in the previous four weeks, they are not considered part of the labor force and do not factor into the unemployment rate.

What Is the Unemployment Rate?

The unemployment rate in the U.S. as of June 2022 is 3.6%. This remains unchanged from the previous month.

The Bottom Line

The majority of the world's economies suffered during the COVID-19 pandemic, with many countries seeing their unemployment levels increase. As the world emerges from the pandemic, conditions have improved; however, the world faces a new set of challenges, such as high inflation, global supply chain problems, and a war in Europe that is impacting food supplies around the world.

Article Sources
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