Long-Term Unemployment Rate
Percentage of the labor force age 25‒54 (“prime age adults”) unemployed for six months or more.
Why did we include this measure?
Short-term unemployment mostly reflects the business cycle, layoffs, and people deciding they are not satisfied with their current jobs. Some degree of unemployment is natural and healthy as it allows both employers and employees to search for better matches between skills and job requirements. However, unemployment becomes a larger problem when people are out of the labor force for long periods of time. The longer workers are out of work, the harder it is to find a job and reengage in gainful employment.
How does the US rank globally?
- Specific Measure: (Same as above.)
(Source: Same as above).
- Percentage of countries the US outperforms: 84% (out of 25 countries)
- International Rank Trend: Stable
National Trend Mixed
What do the data show?
Setting aside recessionary cycles, the trend has been flat and long-term unemployment for prime age workers is quite low—less than 1%. We also do well on this metric compared with other countries. Only three other countries in our data have lower long-term unemployment than the US. Canada, the Netherlands, and South Korea have slightly lower rates.
The 2008 Great Recession had a particularly harmful effect on long-term unemployment. Once people lost their jobs, they had to wait a long time for the recession to end and to find good opportunities.
What might explain these patterns?
Long-term unemployment is one of the bright spots in this section. One reason it is so low is that we have less generous unemployment insurance than other countries, which creates more pressure on workers to accept another job quickly when they are out of work. (US short-term unemployment rates, while not shown, are also low by global standards.)
For more information about data sources and treatments, download the Data Notes.