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June 2002, Vol. 125, No. 6
U.S. labor market performance in international perspectiveConstance Sorrentino and Joyanna Moy
For developed economies, monthly unemployment and employment changes are considered the two most informative labor market indicators, providing knowledge about the current performance of the labor market and the economy as a whole. International analyses often focus on these two key indicators as well, to compare the functioning of labor markets across countries. Researchers have attempted to explain the reasons for international differences and to glean lessons from the more "successful" countries that may be applied toward bringing down unemployment and stimulating job creation in the less successful ones. In fact, the first BLS international comparison of unemployment rates was initiated at the request of a 1961 Presidential Committee that was concerned about the apparently high U.S. unemployment rate compared with rates in Europe and Japan. The BLS program of comparative labor force statistics evolved from that initial study for the Committee,1 and the data from that program permit a long-term international perspective on labor market outcomes.
Unemployment trends over the past 40 years clearly show divergent paths taken by the United States and Europe. From 1960 to 2000, the United States moved from the position of being a country with relatively high unemployment to a nation that attained the lowest jobless rate among the G7 major industrial countries (the United States, Canada, Japan, France, Germany, Italy, and the United Kingdom).2 By contrast, European unemployment rates moved in the opposite direction, from low to high, with the crossover occurring in the mid-1980s. While Europe and the United States were switching positions, Canada and Japan generally maintained their places in the international array: Canada’s jobless rate was frequently the highest, and Japan’s was almost always the lowest, during the 40-year period.
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1 For the full BLS report, see Measuring Employment and Un-employment, Report of the President’s Committee to Appraise Employment and Unemployment Statistics (Washington, DC, U.S. Government Printing Office, September 1962). For articles summarizing the BLS findings, see Robert J. Myers and John H. Chandler, "International Comparisons of Unemployment," Monthly Labor Review, August 1962, pp. 857–64; and "Toward Explaining International Unemployment Rates," Monthly Labor Review, September 1962, pp. 969–74.
2 The Group of Seven (G7) was launched in 1975 at a summit of the heads of State of six countries (the United States, France, Germany, Italy, Japan, and the United Kingdom). Canada was included in 1976. Representatives of the G7 countries meet annually to discuss the principal political and economic issues of the day. Because Russia has taken part in the annual economic discussions since 1997, the group is now often referred to as the G8.
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