presentation of unemployment

Introduction to Unemployment

Chapter objectives.

In this chapter, you will learn about:

• How Economists Define and Compute Unemployment Rate
• Patterns of Unemployment
• What Causes Changes in Unemployment over the Short Run
• What Causes Changes in Unemployment over the Long Run

Bring It Home

Unemployment and the covid-19 pandemic: a complicated story.

It was the most abrupt economic change in the post-World War II era. Between March 2020 and April 2020, the U.S. unemployment rate increased from 4.4% to 14.8%. As a result of the COVID-19 pandemic, millions of people were left without work as businesses shut down and people stayed home and cut their spending, especially on restaurants, tourism, and travel. As confidence and spending were slowly restored, and as the situation with the virus steadily improved, unemployment began to tick down. By 2022, with the availability of vaccines and boosters and other improved health measures, things were better still, but the presence of dangerous variants prevented a full return to normal.

The COVID-19 pandemic had other effects on the labor market as well. Labor force participation—the rate at which people are employed or actively searching for work—declined and as of early-2022 remained lower than it was in 2019. Some were forced to stop working because of school and childcare closures. Others were concerned about how safe their workplaces would be in the middle of a global pandemic. And still others simply chose to retire early. Labor force participation remains a sore spot in the labor market's recovery.

These two statistics—unemployment and labor force participation—show how complicated the labor market can be. As the unemployment rate declined through 2021, the disappointing statistics on labor force participation show weak points. One day you may have read a headline about how easy it was to find a job, and the next day a headline would describe how difficult it was for employers to find workers. By the end of this chapter, you will be in a much better position to make sense of these events.

Unemployment can be a terrible and wrenching life experience—like a serious automobile accident or a messy divorce—whose consequences only someone who has gone through it can fully understand. For unemployed individuals and their families, there is the day-to-day financial stress of not knowing from where the next paycheck is coming. There are painful adjustments, like watching your savings account dwindle, selling a car and buying a cheaper one, or moving to a less expensive place to live. Even when the unemployed person finds a new job, it may pay less than the previous one. For many people, their job is an important part of their self worth. When unemployment separates people from the workforce, it can affect family relationships as well as mental and physical health.

The human costs of unemployment alone would justify making a low level of unemployment an important public policy priority. However, unemployment also includes economic costs to the broader society. When millions of unemployed but willing workers cannot find jobs, economic resource are unused. An economy with high unemployment is like a company operating with a functional but unused factory. The opportunity cost of unemployment is the output that the unemployed workers could have produced.

This chapter will discuss how economists define and compute the unemployment rate. It will examine the patterns of unemployment over time, for the U.S. economy as a whole, for different demographic groups in the U.S. economy, and for other countries. It will then consider an economic explanation for unemployment, and how it explains the patterns of unemployment and suggests public policies for reducing it.

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Unemployment

Introduction to unemployment.

Out of Business Borders was one of the many companies unable to recover from the 2008-2009 economic recession. (Credit: modification of work by Luis Villa del Campo/Flickr Creative Commons)

Unemployment and the Great Recession

Nearly eight million U.S. jobs were lost as a consequence of the Great Recession, which lasted from December 2007 to June 2009. At the outset of the recession, the unemployment rate was 5.0%. The rate began rising several months after the recession began, and it peaked at 10.0% in October 2009, several months after the recession ended, according to the Bureau of Labor Statistics (BLS). The job loss represented a huge number of positions gone. Subsequently, the recovery was tepid. Companies added some positions, but as of summer 2013, four years after the end of the recession, unemployment was about 7.5%, well above the pre-recession rate. Employment began increasing at the outset of 2010, and reached its pre-recession level in mid-2014. However, because of population and labor force growth, the unemployment rate at that point was still slightly above 6%. The economy only returned to an unemployment rate of 5.0% in September 2015, and it has remained at or slightly below that level since then, up through January 2017.

This brief overview of unemployment during and after the Great Recession highlights a few important points. First, unemployment is a lagging indicator of business activity. It didn’t begin to increase until a few months after the onset of the recession, and it didn’t begin to decline until several months after the recovery. Second, the decline in the unemployment rate was quite slow, with the pre-recession unemployment rate only reaching a higher level than six years after the recession ended. This reflects a combination of slow increase in the number of jobs and ongoing increases in the size of the population and the labor force.

It turns out that recent recessions, going back to the early 1990s, have been characterized by longer periods of recovery than their predecessors. We will return to this point at the end of the chapter. However, first we need to examine unemployment. What constitutes it, and how do we measure it?

In this chapter, you will learn about:

• How Economists Define and Compute Unemployment Rate
• Patterns of Unemployment
• What Causes Changes in Unemployment over the Short Run
• What Causes Changes in Unemployment over the Long Run

Unemployment can be a terrible and wrenching life experience—like a serious automobile accident or a messy divorce—whose consequences only someone who has gone through it can fully understand. For unemployed individuals and their families, there is the day-to-day financial stress of not knowing from where the next paycheck is coming. There are painful adjustments, like watching your savings account dwindle, selling a car and buying a cheaper one, or moving to a less expensive place to live. Even when the unemployed person finds a new job, it may pay less than the previous one. For many people, their job is an important part of their self worth. When unemployment separates people from the workforce, it can affect family relationships as well as mental and physical health.

The human costs of unemployment alone would justify making a low level of unemployment an important public policy priority. However, unemployment also includes economic costs to the broader society. When millions of unemployed but willing workers cannot find jobs, economic resource are unused. An economy with high unemployment is like a company operating with a functional but unused factory. The opportunity cost of unemployment is the output that the unemployed workers could have produced.

This chapter will discuss how economists define and compute the unemployment rate. It will examine the patterns of unemployment over time, for the U.S. economy as a whole, for different demographic groups in the U.S. economy, and for other countries. It will then consider an economic explanation for unemployment, and how it explains the patterns of unemployment and suggests public policies for reducing it.

• Principles of Macroeconomics 2e. Provided by : OpenStax. Located at : http://cnx.org/contents/[email protected] . License : CC BY: Attribution . License Terms : Download for free at http://cnx.org/contents/[email protected]

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Unemployment

© 2016 McGraw-Hill Education. All Rights Reserved,

Unemployment in the U.S. from �1900 to 2013

© 2016 McGraw-Hill Education. All Rights Reserved .

Unemployment Rates by Education Attainment, 1970-2013

High school dropouts

College graduates

High school graduates

History of Unemployment in the United States

• Although the unemployment rate in the United States drifted upward between 1960 and 1990, the economic expansion of the 1990s reduced the unemployment rate substantially.

© 2016 McGraw-Hill Education. All Rights Reserved.

• Unemployment peaked at 9.6 percent by 2010 following deterioration of economic conditions in 2008
• Recent unemployment rates in the U.S. have exceeded unemployment rates in Germany and France
• Relates to search
• Policy makers may not be too much concerned with this
• Caused by mismatch
• Policy makers should be very concerned with this
• Example: sectoral shifts
• Fairly predictable for labor force
• In the presence of wage rigidities , changes in demand for products and services may cause changes in derived demand for employees

The Rate of Unemployment

• The steady-state rate of unemployment depends on the transition probabilities among employment, unemployment, and the nonmarket sector.

Flows Between Employment and Unemployment

( E workers)

( U Workers)

Job Losers ( × E )

Job Finders ( h × U )

Suppose a person is either working or unemployed. At any point in time, some workers lose their jobs and unemployed workers find jobs. If the probability of losing a job equals , there are  × E job losers. If the probability of finding a job equals h , there are h × U job finders.

• Let l be the fraction of employed workers who lose their jobs and become unemployed
• Let h be the fraction of unemployed workers who find work and get hired
• In the steady state : lE = hU,
• Labor force: LF = E + U ,
• Thus Unemployment Rate , UR = U/LF = l/(l + h)

Unemployed Persons by Reason for Unemployment, 1967-2013

Job leavers

New entrants

Trends in Alternative Measures of the Unemployment Rate, 1994-2013

Official unemployment rate

marginally attached workers

Official + marginally attached workers +

part-time workers available for full-time work

Selected Hypotheses About Unemployment

The Intertemporal Substitution Hypothesis

• Labor supply increases during a boom and declines during a recession.
• The intertemporal substitution hypothesis argues that the huge shifts in labor supply observed over the business cycle may be the result of workers reallocating their time so as to purchase leisure when it is cheap (during recessions).

The Sectoral Shifts Hypothesis

• The skills of workers laid off from declining industries have to be retooled before they can find jobs in growing industries.
• The sectoral shifts hypothesis, therefore, argues that structural unemployment arises because the skills of workers cannot be easily transferred across sectors.

Implicit Contracts Hypothesis

• Implicit contract theory argues that workers prefer employment contracts where incomes are relatively stable over the business cycle, even if such contracts imply reductions in hours of work during recessions.

Efficiency Wages and Unemployment

• Firms may willingly pay above the market-clearing wage to increase worker productivity (e.g., Ford back in 1914) in particular when it is difficult to monitor worker output.
• These efficiency wages increase productivity by:
• Reducing worker turnover (Remember that turnover is costly for the firm)
• Reducing shirking
• Motivating workers to work harder
• Improving the quality of job applicants
• The above-market efficiency wage generates involuntary unemployment.

Downward Wage Rigidity and Unemployment

• Workers are highly adverse to reductions in wages, as highlighted by implicit contract hypothesis, resulting in what economists call downward wage rigidity.
• As a result, most firms would rather fire some workers than cut wages of all or many workers.
• Empirical Evidence:

The importance of downward wage rigidity could be observed in the distribution of wage increases at a large firm (with about 15,000 employees) in 2008.

A Brief Remark on Modelling Job Search

• The asking wage makes the worker indifferent between continuing his search activities and accepting the job offer at hand.
• An increase in the benefits from search raises the asking wage and lengthens the duration of the unemployment spell.
• An increase in search costs reduces the asking wage and shortens the duration of the unemployment spell.

Determination of the Asking Wage

The marginal revenue curve gives the gain from an additional search. It is downward sloping because the better the offer at hand, the less there is to gain from an additional search

The marginal cost curve gives the cost of an additional search. It is upward sloping because the better the job offer at hand, the greater the opportunity cost of an additional search.

The asking wage equates the marginal revenue and the marginal cost of search.

Discount Rates, Unemployment Insurance, and the Asking Wage

Unemployment Compensation

• Unemployment benefits are typically paid up to 26 weeks of unemployment , but this length is frequently extended by Congress during recessions.
• The replacement ratio averages about 60% for low-wage workers and about 25% for high-wage workers.
• Unemployment insurance lengthens the duration of unemployment spells and increases the probability that workers are laid off temporarily.

The Probability of Finding a New Job and UI Benefits

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AP®︎/College Macroeconomics

Course: ap®︎/college macroeconomics   >   unit 2.

• Unemployment rate primer
• Natural, cyclical, structural, and frictional unemployment rates
• Worked free response question on unemployment

Lesson summary: Unemployment

• Unemployment
• Types of unemployment and the natural rate of unemployment

Lesson overview

Key takeaways, the labor force participation rate (lfpr), limitations of the unemployment rate, three types of unemployment, the natural rate of unemployment, changes in the natural rate of unemployment (nru), key equations, the labor force:, the unemployment rate (ur), common misperceptions.

• Not everyone who is out of work is unemployed. In order to be counted as unemployed you have to be out of work, looking for work, and able to accept a job if one is offered to you. If you are out of work and not looking, then you are considered “not in the labor force” rather than unemployed.
• We tend to think of unemployment as an undesirable thing, but a certain amount of unemployment is actually part of a healthy economy. Structural unemployment occurs when new industries are created and old industries become obsolete. For example, when we moved from using horses and buggies to using cars to get around, this put a lot of buggy makers in the structurally unemployed category.
• Frictional unemployment might not seem very fun, but consider what it means to have zero unemployment—nobody ever looks for a job, they just remain in whatever job they are given! In fact, a number of dystopian novels have been written in which everyone in a society is automatically assigned a fixed career (such as the Divergent series). Those societies have zero frictional unemployment, but they are also quite unpleasant if you are unhappy with that career!
• A decrease in the unemployment rate isn’t necessarily a sign of an improving economy. When people stop looking for jobs and drop out of the labor force as discouraged workers, the unemployment rate will decrease even though the true employment situation hasn’t gotten any better. This is why it is important to look at both changes in the unemployment rate and changes in the labor force participation rate. Looking at both changes let’s you get a more complete idea about changes in the employment situation.

Discussion Questions:

• An inventor in Burginville developed a fantastic new dictation machine that perfectly records speech and turns it into a typed document. Unfortunately, that meant that unemployment increased among typists working in offices. Which type of unemployment is this? Explain. Solution, please. This is structural unemployment because typists skills are no longer desired. The changing structure of office work has resulted in people losing their jobs.
• The nation of Fitlandia has 120 , 000 ‍   people. Of these, 20 , 000 ‍   are children under the age of 16, 72,000 ‍   have jobs, 8,000 ‍   don’t have jobs and are looking for work, and 20,000 ‍   people are retired. Assuming that these are all noninstitutionalized civilians, calculate the labor force participation rate and the unemployment rate. I think I got it. Can I check my work? L F = # Employed + # Unemployed = 72,000 + 8,000 = 80,000 L F P R = L F Eligible Population × 100 % = 80,000 100,000 × 100 % = 80 % U R = # Unemployed # Labor Force × 100 % = 8,000 80,000 × 100 % = 10 % ‍  
• Explain why a decrease in the unemployment rate can actually signal a tough job market.

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5.3 Unemployment

Learning objectives.

• Explain how unemployment is measured in the United States.
• Define three different types of unemployment.
• Define and illustrate graphically what is meant by the natural level of employment. Relate the natural level of employment to the natural rate of unemployment.

For an economy to produce all it can and achieve a solution on its production possibilities curve, the factors of production in the economy must be fully employed. Failure to fully employ these factors leads to a solution inside the production possibilities curve in which society is not achieving the output it is capable of producing.

In thinking about the employment of society’s factors of production, we place special emphasis on labor. The loss of a job can wipe out a household’s entire income; it is a more compelling human problem than, say, unemployed capital, such as a vacant apartment. In measuring unemployment, we thus focus on labor rather than on capital and natural resources.

Measuring Unemployment

The Bureau of Labor Statistics defines a person as unemployed if he or she is not working but is looking for and available for work. The labor force is the total number of people working or unemployed. The unemployment rate is the percentage of the labor force that is unemployed.

To estimate the unemployment rate, government surveyors fan out across the country each month to visit roughly 60,000 households. At each of these randomly selected households, the surveyor asks about the employment status of each adult (everyone age 16 or over) who lives there. Many households include more than one adult; the survey gathers information on about roughly 100,000 adults. The surveyor asks if each adult is working. If the answer is yes, the person is counted as employed. If the answer is no, the surveyor asks if that person has looked for work at some time during the previous four weeks and is available for work at the time of the survey. If the answer to that question is yes, the person is counted as unemployed. If the answer is no, that person is not counted as a member of the labor force. Figure 5.4 “Computing the Unemployment Rate” shows the survey’s results for the civilian (nonmilitary) population for February 2012. The unemployment rate is then computed as the number of people unemployed divided by the labor force—the sum of the number of people not working but available and looking for work plus the number of people working. In February 2012, the unemployment rate was 8.3%.

Figure 5.4 Computing the Unemployment Rate

A monthly survey of households divides the civilian adult population into three groups. Those who have jobs are counted as employed; those who do not have jobs but are looking for them and are available for work are counted as unemployed; and those who are not working and are not looking for work are not counted as members of the labor force. The unemployment rate equals the number of people looking for work divided by the sum of the number of people looking for work and the number of people employed. Values are for February 2012. All numbers are in thousands.

There are several difficulties with the survey. The old survey, designed during the 1930s, put the “Are you working?” question differently depending on whether the respondent was a man or woman. A man was asked, “Last week, did you do any work for pay or profit?” A woman was asked, “What were you doing for work last week, keeping house or something else?” Consequently, many women who were looking for paid work stated that they were “keeping house”; those women were not counted as unemployed. The BLS did not get around to fixing the survey—asking women the same question it asked men—until 1994. The first time the new survey question was used, the unemployment rate among women rose by 0.5 percentage point. More than 50 million women are in the labor force; the change added more than a quarter of a million workers to the official count of the unemployed. [1]

The problem of understating unemployment among women has been fixed, but others remain. A worker who has been cut back to part-time work still counts as employed, even if that worker would prefer to work full time. A person who is out of work, would like to work, has looked for work in the past year, and is available for work, but who has given up looking, is considered a discouraged worker. Discouraged workers are not counted as unemployed, but a tally is kept each month of the number of discouraged workers.

The official measures of employment and unemployment can yield unexpected results. For example, when firms expand output, they may be reluctant to hire additional workers until they can be sure the demand for increased output will be sustained. They may respond first by extending the hours of employees previously reduced to part-time work or by asking full-time personnel to work overtime. None of that will increase employment, because people are simply counted as “employed” if they are working, regardless of how much or how little they are working. In addition, an economic expansion may make discouraged workers more optimistic about job prospects, and they may resume their job searches. Engaging in a search makes them unemployed again—and increases unemployment. Thus, an economic expansion may have little effect initially on employment and may even increase unemployment.

Types of Unemployment

Workers may find themselves unemployed for different reasons. Each source of unemployment has quite different implications, not only for the workers it affects but also for public policy.

Figure 5.5 “The Natural Level of Employment” applies the demand and supply model to the labor market. The price of labor is taken as the real wage, which is the nominal wage divided by the price level; the symbol used to represent the real wage is the Greek letter omega, ω. The supply curve is drawn as upward sloping, though steep, to reflect studies showing that the quantity of labor supplied at any one time is nearly fixed. Thus, an increase in the real wage induces a relatively small increase in the quantity of labor supplied. The demand curve shows the quantity of labor demanded at each real wage. The lower the real wage, the greater the quantity of labor firms will demand. In the case shown here, the real wage, ω e , equals the equilibrium solution defined by the intersection of the demand curve D 1 and the supply curve S 1 . The quantity of labor demanded, L e , equals the quantity supplied. The employment level at which the quantity of labor demanded equals the quantity supplied is called the natural level of employment . It is sometimes referred to as full employment.

Figure 5.5 The Natural Level of Employment

The employment level at which the quantity of labor demanded equals the quantity supplied is called the natural level of employment. Here, the natural level of employment is L e , which is achieved at a real wage ω e .

Even if the economy is operating at its natural level of employment, there will still be some unemployment. The rate of unemployment consistent with the natural level of employment is called the natural rate of unemployment . Business cycles may generate additional unemployment. We discuss these various sources of unemployment below.

Frictional Unemployment

Even when the quantity of labor demanded equals the quantity of labor supplied, not all employers and potential workers have found each other. Some workers are looking for jobs, and some employers are looking for workers. During the time it takes to match them up, the workers are unemployed. Unemployment that occurs because it takes time for employers and workers to find each other is called frictional unemployment .

The case of college graduates engaged in job searches is a good example of frictional unemployment. Those who did not land a job while still in school will seek work. Most of them will find jobs, but it will take time. During that time, these new graduates will be unemployed. If information about the labor market were costless, firms and potential workers would instantly know everything they needed to know about each other and there would be no need for searches on the part of workers and firms. There would be no frictional unemployment. But information is costly. Job searches are needed to produce this information, and frictional unemployment exists while the searches continue.

The government may attempt to reduce frictional unemployment by focusing on its source: information costs. Many state agencies, for example, serve as clearinghouses for job market information. They encourage firms seeking workers and workers seeking jobs to register with them. To the extent that such efforts make labor-market information more readily available, they reduce frictional unemployment.

Structural Unemployment

Another reason there can be unemployment even if employment equals its natural level stems from potential mismatches between the skills employers seek and the skills potential workers offer. Every worker is different; every job has its special characteristics and requirements. The qualifications of job seekers may not match those that firms require. Even if the number of employees firms demand equals the number of workers available, people whose qualifications do not satisfy what firms are seeking will find themselves without work. Unemployment that results from a mismatch between worker qualifications and the characteristics employers require is called structural unemployment .

Structural unemployment emerges for several reasons. Technological change may make some skills obsolete or require new ones. The widespread introduction of personal computers since the 1980s, for example, has lowered demand for typists who lacked computer skills.

Structural unemployment can occur if too many or too few workers seek training or education that matches job requirements. Students cannot predict precisely how many jobs there will be in a particular category when they graduate, and they are not likely to know how many of their fellow students are training for these jobs. Structural unemployment can easily occur if students guess wrong about how many workers will be needed or how many will be supplied.

Structural unemployment can also result from geographical mismatches. Economic activity may be booming in one region and slumping in another. It will take time for unemployed workers to relocate and find new jobs. And poor or costly transportation may block some urban residents from obtaining jobs only a few miles away.

Public policy responses to structural unemployment generally focus on job training and education to equip workers with the skills firms demand. The government publishes regional labor-market information, helping to inform unemployed workers of where jobs can be found. The North American Free Trade Agreement (NAFTA), which created a free trade region encompassing Mexico, the United States, and Canada, has created some structural unemployment in the three countries. In the United States, the legislation authorizing the pact also provided for job training programs for displaced U.S. workers.

Although government programs may reduce frictional and structural unemployment, they cannot eliminate it. Information in the labor market will always have a cost, and that cost creates frictional unemployment. An economy with changing demands for goods and services, changing technology, and changing production costs will always have some sectors expanding and others contracting—structural unemployment is inevitable. An economy at its natural level of employment will therefore have frictional and structural unemployment.

Cyclical Unemployment

Of course, the economy may not be operating at its natural level of employment, so unemployment may be above or below its natural level. In a later chapter we will explore what happens when the economy generates employment greater or less than the natural level. Cyclical unemployment is unemployment in excess of the unemployment that exists at the natural level of employment.

Figure 5.6 “Unemployment Rate, 1960–2011” shows the unemployment rate in the United States for the period from 1960 through 2011. We see that it has fluctuated considerably. How much of it corresponds to the natural rate of unemployment varies over time with changing circumstances. For example, in a country with a demographic “bulge” of new entrants into the labor force, frictional unemployment is likely to be high, because it takes the new entrants some time to find their first jobs. This factor alone would raise the natural rate of unemployment. A demographic shift toward more mature workers would lower the natural rate. During recessions, highlighted in Figure 5.6 “Unemployment Rate, 1960–2011” , the part of unemployment that is cyclical unemployment grows. The analysis of fluctuations in the unemployment rate, and the government’s responses to them, will occupy center stage in much of the remainder of this book.

Figure 5.6 Unemployment Rate, 1960–2011

The chart shows the unemployment rate for each year from 1960 to 2011. Recessions are shown as shaded areas.

Source : Economic Report of the President , 2012, Table B-42.

Key Takeaways

• People who are not working but are looking and available for work at any one time are considered unemployed. The unemployment rate is the percentage of the labor force that is unemployed.
• When the labor market is in equilibrium, employment is at the natural level and the unemployment rate equals the natural rate of unemployment.
• Even if employment is at the natural level, the economy will experience frictional and structural unemployment. Cyclical unemployment is unemployment in excess of that associated with the natural level of employment.

Given the data in the table, compute the unemployment rate in Year 1 and in Year 2. Explain why, in this example, both the number of people employed and the unemployment rate increased.

Case in Point: Might Increased Structural Unemployment Explain the “Jobless Recovery” Following the 2001 Recession?

A. Golden – the US$ 3 TRILLION HEIST, – CC BY-NC-ND 2.0.

The U.S. 2001 recession was mild by historical standards, but recovery in terms of increased employment seemed painfully slow in coming. Economists Erica Goshen and Simon Potter at the Federal Reserve Bank of New York think the reason for the slow recovery in jobs may have actually reflected structural changes in the U.S. economy. They argue that during the recession permanent rather than temporary layoffs predominated and that it takes longer for firms to hire workers into new positions than to hire them back into former jobs.

What is their evidence? When the layoff is temporary, the employer “suspends” the job, due to slack demand, and the employee expects to be recalled once demand picks up. With a permanent layoff, the employer eliminates the job. So, they looked at the contribution of temporary layoffs to the unemployment rate during the recent recession compared to the situation in the four recessions before 1990. In the earlier recessions, unemployment from temporary layoffs rose when the economy was shrinking and fell after the economy began to recover. In both the 1991 and 2001 recessions, temporary layoffs were minor. Then, the authors examined job flows in 70 industries. They classified layoffs in an industry as being cyclical in nature if the job losses during the recession were reversed during the recovery but structural if job losses for the industry continued during the recovery. Their analysis revealed that during the recession of the early 1980s, job losses were about evenly split between cyclical and structural changes. In the 1991 recession and then more strongly in the 2001 recession, structural changes dominated. “Most of the industries that lost jobs during the [2001] recession—for example, communications, electronic equipment, and securities and commodities brokers—[were] still losing jobs” in 2003. “The trend revealed . . . is one in which jobs are relocated from some industries to others, not reclaimed by the same industries that lost them earlier.”

The authors suggest three possible reasons for the recent increased role of structural change: (1) The structural decline in some industries could be the result of overexpansion in those industries during the 1990s. The high tech and telecommunications industries in particular could be examples of industries that were overbuilt before the 2001 recession. (2) Improved government policies may have reduced cyclical unemployment. Examination of macroeconomic policy in future chapters will return to this issue. (3) New management strategies to reduce costs may be promoting leaner staffing. For firms adopting such strategies, a recession may provide an opportunity to reorganize the production process permanently and reduce payrolls in the process.

Goshen and Potter point out that, for workers, finding new jobs is harder than simply returning to old ones. For firms, making decisions about the nature of new jobs is time consuming at best. The uncertainty created by the war in Iraq and the imposition of new accounting standards following the “Enron”-like scandals may have further prolonged the creation of new jobs.

Source : Erica L. Goshen and Simon Potter, “Has Structural Change Contributed to a Jobless Recovery?” Federal Reserve Bank of New York Current Issues in Economics and Finance 9, no. 8 (August 2003): 1–7.

Answer to Try It! Problem

In Year 1 the total labor force includes 22 million workers, and so the unemployment rate is 2/22 = 9.1%. In Year 2 the total labor force numbers 23.4 million workers; therefore the unemployment rate is 2.4/23.4 = 10.3%. In this example, both the number of people employed and the unemployment rate rose, because more people (23.4 − 22 = 1.4 million) entered the labor force, of whom 1 million found jobs and 0.4 million were still looking for jobs.

• For a description of the new survey and other changes introduced in the method of counting unemployment, see Janet L. Norwood and Judith M. Tanur, “Unemployment Measures for the Nineties,” Public Opinion Quarterly 58, no. 2 (Summer 1994): 277–94. ↵

Principles of Macroeconomics Copyright © 2016 by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.

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The Bottom Line

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more. Her expertise is in personal finance and investing, and real estate.

The term unemployment refers to a situation where a person actively searches for employment but is unable to find work. Unemployment is considered to be a key measure of the health of the economy. The most frequently used measure of unemployment is the unemployment rate . It's calculated by dividing the number of unemployed people by the number of people in the labor force.

Key Takeaways

• Unemployment occurs when workers who want to work are unable to find jobs.
• High rates of unemployment signal economic distress while extremely low rates of unemployment may signal an overheated economy.
• Unemployment can be classified as frictional, cyclical, structural, or institutional.
• Unemployment data is collected and published by government agencies in a variety of ways.
• Many governments offer unemployed individuals a small amount of income through unemployment insurance, as long as they meet certain requirements.

Michela Buttignol

How is Unemployment Defined?

Understanding unemployment.

Unemployment is a key economic indicator because it signals the ability (or inability) of workers to obtain gainful work and contribute to the productive output of the economy. More unemployed workers mean less total economic production.

The unemployment definition doesn't include people who leave the workforce for reasons such as retirement, higher education, and disability.

Sign of Economic Distress

Unemployed workers must maintain at least subsistence consumption during their period of unemployment. This means that an economy with high unemployment has lower output without a proportional decline in the need for basic consumption.

High, persistent unemployment can signal serious distress in an economy and even lead to social and political upheaval.

Sign of an Overheating Economy

A low unemployment rate, on the other hand, means that the economy is more likely to be producing near its full capacity, maximizing output, driving wage growth, and raising living standards over time.

However, extremely low unemployment can also be a cautionary sign of an overheating economy, inflationary pressures, and tight conditions for businesses in need of additional workers.

Categories of Unemployment

While the definition of unemployment is clear, economists divide unemployment into many different categories. The two broadest categories are voluntary and involuntary unemployment. When unemployment is voluntary, it means that a person left their job willingly in search of other employment. When it is involuntary, it means that a person was fired or laid off and must now look for another job.

Types of Unemployment

Both voluntary and involuntary unemployment can be broken down into four types.

Frictional Unemployment

This type of unemployment is usually short-lived. It is also the least problematic from an economic standpoint. It occurs when people voluntarily change jobs. After a person leaves a company, it naturally takes time to find another job. Similarly, graduates just starting to look for jobs to enter the workforce add to frictional unemployment.

Frictional unemployment is a natural result of the fact that market processes take time and information can be costly. Searching for a new job, recruiting new workers, and matching the right workers to the right jobs all take time and effort. This results in frictional unemployment.

Cyclical Unemployment

Cyclical unemployment is the variation in the number of unemployed workers over the course of economic upturns and downturns, such as those related to changes in oil prices. Unemployment rises during recessionary periods and declines during periods of economic growth.

Preventing and alleviating cyclical unemployment during recessions is one of the key reasons for the study of economics and the various policy tools that governments employ to stimulate the economy on the downside of business cycles.

Structural Unemployment

Structural unemployment comes about through a technological change in the structure of the economy in which labor markets operate. Technological changes can lead to unemployment among workers displaced from jobs that are no longer needed. Examples of such changes include the replacement of horse-drawn transport with automobiles and the automation of manufacturing.

Retraining these workers can be difficult, costly, and time-consuming. Displaced workers often end up either unemployed for extended periods or leaving the labor force entirely.

Institutional Unemployment

Institutional unemployment results from long-term or permanent institutional factors and incentives in the economy.

The following can all contribute to institutional unemployment:

• Government policies, such as high minimum wage floors, generous social benefits programs, and restrictive occupational licensing laws
• Labor market phenomena, such as efficiency wages and discriminatory hiring
• Labor market institutions, such as high rates of unionization

Many governments offer unemployment insurance to certain unemployed individuals who meet eligibility requirements.

How to Measure Unemployment

The U.S. government uses surveys, census counts, and the number of unemployment insurance claims to track unemployment.

The U.S. Census conducts a monthly survey called the Current Population Survey (CPS) on behalf of the Bureau of Labor Statistics (BLS) to produce the primary estimate of the nation’s unemployment rate. This survey has been done every month since 1940.

The sample consists of about 60,000 eligible households. That translates to about 110,000 people each month. The Census changes a quarter of the sampled households each month so that no household is represented for more than four consecutive months. This is meant to strengthen the reliability of the estimates.

Many variations of the unemployment rate exist, with different definitions of who is an unemployed person and who is in the labor force.

The BLS commonly cites the U-3 unemployment rate (defined as the total unemployed as a percentage of the civilian labor force) as the official unemployment rate; however, this definition does not include discouraged unemployed workers who are no longer looking for work.

Other categories of unemployment include discouraged workers and part-time or underemployed workers who want to work full-time but, for economic reasons, are unable to do so.

History of Unemployment

Although the U.S. government began tracking unemployment in the 1940s, the highest rate of unemployment to date occurred during the Great Depression, when unemployment rose to 24.9% in 1933.

Between 1931 and 1940, the unemployment rate remained above 14% but subsequently dropped down to the single digits. It remained there until 1982 when it climbed above 10%.

In 2009, during the Great Recession, unemployment again rose to 10%. In April 2020, amid the COVID-19 pandemic, unemployment hit 14.8%. As of March 2024, the unemployment rate was 3.8%.

What Are the Main Causes of Unemployment?

There are many reasons for unemployment. These include recessions, depressions, technological improvements, job outsourcing, and voluntarily leaving one job to find another.

What Are the 3 Types of Unemployment?

Today's economists point to three main types of unemployment: frictional, structural, and cyclical. Frictional unemployment is the result of voluntary employment transitions within an economy. Frictional unemployment naturally occurs, even in a growing, stable economy as workers change jobs.

Structural unemployment can produce permanent disruptions due to fundamental and permanent changes that occur in the structure of the economy. These changes can marginalize a group of workers. They include technological changes, a lack of relevant skills, and jobs moving overseas to another country. Cyclical unemployment relates to the loss of jobs that occurs during changes in business cycles.

What Is the Strict Definition of Unemployment?

The official unemployment definition comes from the U.S. Bureau of Labor Statistics, which states that "people are classified as unemployed if they do not have a job, have actively looked for work in the prior four weeks, and are currently available for work."

Unemployment is when an individual who is not employed and is seeking employment, cannot find work. Unemployment is a key indicator of the health of an economy. A low unemployment rate represents a strong economy while a high unemployment rate represents a weak economy.

U.S. Bureau of Labor Statistics. “ How the Government Measures Unemployment ."

U.S. Bureau of Labor Statistics. " Concepts and Definitions (CPS) ."

U.S. Bureau of Labor Statistics. " Alternative Measures of Labor Underutilization for States, 2023 Annual Averages ."

U.S. Bureau of Labor Statistics. “ Table A-15. Alternative Measures of Labor Underutilization .”

U.S. Census Bureau. " Chapter D, Labor: Labor Force (Series D 1-682) ." Page 135.

Federal Reserve Bank of St. Louis, FRED. “ Unemployment Rate .”

• What Is Unemployment? Causes, Types, and Measurement 1 of 43
• What Does Termination of Employment Mean? 2 of 43
• What Is an Unemployment Claim? 3 of 43
• Unemployment Compensation: Definition, Requirements, and Example 4 of 43
• What Is Severance Pay? Definition and Why It's Offered 5 of 43
• The Layoff Payoff: A Severance Package 6 of 43
• 7 Considerations When You Negotiate Severance 7 of 43
• 7 Effective Ways to Prepare for a Layoff 8 of 43
• Unemployment Insurance (UI): How It Works, Requirements, and Funding 9 of 43
• How to Apply for Unemployment Insurance Now 10 of 43
• Who Doesn't Get Unemployment Insurance? 11 of 43
• What Was Private Unemployment Insurance? 12 of 43
• How to Pay Your Bills When You Lose Your Job 13 of 43
• Can I Access Money in My 401(k) If I Am Unemployed? 14 of 43
• All About COBRA Health Insurance 15 of 43
• Medical Debt: What to Do When You Can’t Pay 16 of 43
• Help, My Unemployment Benefits Are Running Out 17 of 43
• What Is the Unemployment Rate? Rates by State 18 of 43
• How Is the U.S. Monthly Unemployment Rate Calculated? 19 of 43
• Unemployment Rates: The Highest and Lowest Worldwide 20 of 43
• What You Need to Know About the Employment Report 21 of 43
• U-3 vs. U-6 Unemployment Rate: What's the Difference? 22 of 43
• Participation Rate vs. Unemployment Rate: What's the Difference? 23 of 43
• What the Unemployment Rate Does Not Tell Us 24 of 43
• How the Unemployment Rate Affects Everybody 25 of 43
• How Inflation and Unemployment Are Related 26 of 43
• How the Minimum Wage Impacts Unemployment 27 of 43
• The Cost of Unemployment to the Economy 28 of 43
• Okun’s Law: Economic Growth and Unemployment 29 of 43
• What Can Policymakers Do To Decrease Cyclical Unemployment? 30 of 43
• What Happens When Inflation and Unemployment Are Positively Correlated? 31 of 43
• The Downside of Low Unemployment 32 of 43
• Frictional vs. Structural Unemployment: What’s the Difference? 33 of 43
• Structural vs. Cyclical Unemployment: What's the Difference? 34 of 43
• Cyclical Unemployment: Definition, Cause, Types, and Example 35 of 43
• Disguised Unemployment: Definition and Different Types 36 of 43
• Employment-to-Population Ratio: Definition and What It Measures 37 of 43
• Frictional Unemployment: Definition, Causes, and Quit Rate Explained 38 of 43
• Full Employment: Definition, Types, and Examples 39 of 43
• Labor Force Participation Rate: Purpose, Formula, and Trends 40 of 43
• Labor Market Explained: Theories and Who Is Included 41 of 43
• What Is the Natural Unemployment Rate? 42 of 43
• Structural Unemployment: Definition, Causes, and Examples 43 of 43

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Unemployment in the U.S.- statistics & facts

Unemployment trends across groups, politics and business confidence, tech advancements and globalization, key insights.

Detailed statistics

U.S. seasonally adjusted unemployment rate 2022-2024

U.S. youth unemployment rate seasonally adjusted 2022-2024

U.S. unemployment rate of recent graduates 2016-2023

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Current statistics on this topic.

U.S. unemployment rates for large metropolitan areas 2024

U.S. unemployment rate, by ethnicity 2023

Related topics

• Unemployment in Europe
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• Unemployment in the UK
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U.S. employment

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• Employment in the U.S. aviation industry

Employment in Africa

• Employment in Algeria
• Employment in Egypt
• Employment in Ghana
• Employment in Morocco
• Employment in Nigeria
• Employment in South Africa
• Employment in Tunisia

Employment in major economies

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• Employment in China
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• Basic Statistic U.S. seasonally adjusted unemployment rate 2022-2024
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U.S. unemployment level 1990-2023

Number of unemployed persons in the United States from 1990 to 2023 (in millions)

U.S. monthly number of job losers 2022-2024

Monthly number of job losers in the United States from March 2022 to March 2024 (in millions, seasonally adjusted)

U.S. annual unemployment rate 1990-2022

Unemployment rate in the United States from 1990 to 2022

U.S. unemployment level seasonally adjusted monthly number 2022-2024

Monthly number of unemployed persons in the United States from March 2022 to March 2024 (in millions, adjusted)

Monthly unemployment rate in the United States from March 2022 to March 2024 (seasonally-adjusted)

U.S. unemployment rate 2024, by occupation

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Unemployment demographics

• Basic Statistic U.S. male unemployment rate 1990-2023
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• Basic Statistic U.S. unemployment rate 1992-2022, by level of education
• Basic Statistic U.S. unemployment rate of high school graduates and dropouts 2022
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• Basic Statistic U.S. youth unemployment rate seasonally adjusted 2022-2024

U.S. male unemployment rate 1990-2023

Unemployment rate of men in the United States from 1990 to 2023

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Unemployment rate of high school graduates and dropouts not enrolled in school in the United States from 2000 to 2022

Unemployment rate of recent graduates in the United States from December 2016 to December 2024

Monthly youth (16-24) unemployment rate in the United States from March 2022 to March 2024 (seasonally adjusted)

Unemployment by location

• Basic Statistic U.S. annual unemployment rate 2022, by state
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• Basic Statistic U.S. leading metropolitan areas with the highest unemployment rate 2022
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Monthly ranking of unemployment rates in the United States for larger metropolitan areas in February 2024

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What the New Overtime Rule Means for Workers

One of the basic principles of the American workplace is that a hard day’s work deserves a fair day’s pay. Simply put, every worker’s time has value. A cornerstone of that promise is the  Fair Labor Standards Act ’s (FLSA) requirement that when most workers work more than 40 hours in a week, they get paid more. The  Department of Labor ’s new overtime regulation is restoring and extending this promise for millions more lower-paid salaried workers in the U.S.

Overtime protections have been a critical part of the FLSA since 1938 and were established to protect workers from exploitation and to benefit workers, their families and our communities. Strong overtime protections help build America’s middle class and ensure that workers are not overworked and underpaid.

Some workers are specifically exempt from the FLSA’s minimum wage and overtime protections, including bona fide executive, administrative or professional employees. This exemption, typically referred to as the “EAP” exemption, applies when: 

1. An employee is paid a salary,  

2. The salary is not less than a minimum salary threshold amount, and 

3. The employee primarily performs executive, administrative or professional duties.

While the department increased the minimum salary required for the EAP exemption from overtime pay every 5 to 9 years between 1938 and 1975, long periods between increases to the salary requirement after 1975 have caused an erosion of the real value of the salary threshold, lessening its effectiveness in helping to identify exempt EAP employees.

The department’s new overtime rule was developed based on almost 30 listening sessions across the country and the final rule was issued after reviewing over 33,000 written comments. We heard from a wide variety of members of the public who shared valuable insights to help us develop this Administration’s overtime rule, including from workers who told us: “I would love the opportunity to...be compensated for time worked beyond 40 hours, or alternately be given a raise,” and “I make around $40,000 a year and most week[s] work well over 40 hours (likely in the 45-50 range). This rule change would benefit me greatly and ensure that my time is paid for!” and “Please, I would love to be paid for the extra hours I work!”

The department’s final rule, which will go into effect on July 1, 2024, will increase the standard salary level that helps define and delimit which salaried workers are entitled to overtime pay protections under the FLSA. 

Starting July 1, most salaried workers who earn less than $844 per week will become eligible for overtime pay under the final rule. And on Jan. 1, 2025, most salaried workers who make less than $1,128 per week will become eligible for overtime pay. As these changes occur, job duties will continue to determine overtime exemption status for most salaried employees.

The rule will also increase the total annual compensation requirement for highly compensated employees (who are not entitled to overtime pay under the FLSA if certain requirements are met) from $107,432 per year to $132,964 per year on July 1, 2024, and then set it equal to $151,164 per year on Jan. 1, 2025.

Starting July 1, 2027, these earnings thresholds will be updated every three years so they keep pace with changes in worker salaries, ensuring that employers can adapt more easily because they’ll know when salary updates will happen and how they’ll be calculated.

The final rule will restore and extend the right to overtime pay to many salaried workers, including workers who historically were entitled to overtime pay under the FLSA because of their lower pay or the type of work they performed. 

We urge workers and employers to visit  our website to learn more about the final rule.

Jessica Looman is the administrator for the U.S. Department of Labor’s Wage and Hour Division. Follow the Wage and Hour Division on Twitter at  @WHD_DOL  and  LinkedIn .  Editor's note: This blog was edited to correct a typo (changing "administrator" to "administrative.")

• Wage and Hour Division (WHD)
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US applications for jobless claims fall to lowest level in 9 weeks

Fewer Americans applied for unemployment benefits last week as the labor market continues to hold up despite higher interest rates imposed by the Federal Reserve in its bid to curb inflation

Fewer Americans applied for unemployment benefits last week as the labor market continues to hold up despite higher interest rates imposed by the Federal Reserve in its bid to curb inflation.

The Labor Department reported Thursday that unemployment claims for the week ending April 20 fell by 5,000 to 207,000 from 212,000 the previous week. That's the fewest since mid-February.

The four-week average of claims, which smooths out some of the weekly up-and-downs, ticked down by 1,250 to 213,250.

Weekly unemployment claims are considered a proxy for the number of U.S. layoffs in a given week and a sign of where the job market is headed. They have remained at historically low levels since the pandemic purge of millions of jobs in the spring of 2020.

The Federal Reserve raised its benchmark borrowing rate 11 times beginning in March of 2022 in a bid to stifle the four-decade high inflation that took hold after the economy rebounded from the COVID-19 recession four years ago. The Fed’s intention was to loosen the labor market and slow wage growth, which it said contributed to persistently high inflation.

Many economists thought there was a chance the rapid rate hikes could cause a recession, but jobs have remained plentiful and the economy surged on strong consumer spending.

Last month, U.S. employers added a surprising 303,000 jobs, yet another example of the U.S. economy’s resilience in the face of high interest rates. The unemployment rate dipped from 3.9% to 3.8% and has now remained below 4% for 26 straight months, the longest such streak since the 1960s.

Though layoffs remain at low levels, companies have been announcing more job cuts recently, mostly across technology and media. Google parent company Alphabet, Apple, eBay, TikTok , Snap, Amazon, Cisco Systems and the Los Angeles Times have all recently announced layoffs.

Outside of tech and media, UPS, Macy’s, Tesla and Levi Strauss also have recently cut jobs.

In total, 1.78 million Americans were collecting jobless benefits during the week that ended April 13. That's 15,000 fewer than the previous week.

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UNN to reduce unemployment among Nigerian graduates through mentoring

The university identified increasing number of unemployable graduates due to their ill-equipped and ill-prepared for life and work.

The University of Nigeria (UNN) Technology Advancement Programme (UNTAP), on Thursday, began an innovative forum to address the increasing number of unemployable graduates in the country.

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The News Agency of Nigeria (NAN) reports that the forum tagged “ UNTAP Innovative Forum” is aimed at encouraging students to present their innovative skills before some captains of industry for sponsorship.

The event held at the University of Nigeria Enugu Campus (UNEC), has the theme “Presentation of Innovative Idea from Creative Forum”. NAN reports that eight students were selected to present their innovative works before the captains of industries and prospective sponsors.

Speaking at the event, the Director of UNTAP, Prof. Geraldine Ugwuonah , said the forum was aimed at harvesting talent from the young people and lecturers from the university.

She said the university had identified an increasing number of unemployable graduates due to their ill-equipped and ill-prepared for life and work and decided to change the narrative.

Ugwuonah, a Professor of Marketing at the University, said the event was its maiden outing to create awareness for a wider community. According to Ugwuonah, a lot of students have ideas lying idle inside them but lack mentoring and sponsorship.

“ I work with my team members to identify and work towards realising these innovative ideas in them.

“We have listened to them before as we started since February and we try to fine-tune some of the ideas they had by putting them into perspective.

“Those that participated in the presentation will be our ambassadors. We brought people who are from industries to hear them out and support them,” she said.

She added that through UNTAP they had linked so many others to sponsors, adding that the university was planning a bigger event to gather the students to listen and learn how to develop their ideas.

Also speaking, the Manager of UNTAP, Dr Chinedum Aranotu , said the centre started in 2015 to help student inventors initiate ideas and take them up to the next level. He said that they took the students through different processes that included coaching, mentoring and sponsoring.

“Aaron Esumeh, the Chief Executive Officer of Greenage Technologies was my first product and today, they are building the biggest inverter battery in Nigeria through funded agencies in USA and Europe.

“The investors are here to support them and after prototype, we start taking them round. We will keep encouraging them, taking their products to different levels until they see people that buy into the ideas,” he stated.

An investor and owner of Bon Sunshine Hotel in Enugu, Emeka Nwandu , expressed satisfaction with the presentations by the participants and pledged to assist those who focused on renewable energy. He commended UNTAP for the initiative which he said would go a long way in reducing unemployment in the country.

Sharing his experience, Esumeh, who manufactures solar equivalent inverters and charge controllers in Enugu, said they started from a programme like UNTAP until help came their way. While encouraging them never to give up, he pledged to support the winner of the presentation, Victory Wellington with ₦1.5 million to develop his project.

Responding, Wellington , a 100-level student of Civil Engineering, at UNN, presenting his innovation on Renewal Energy, said the constant epileptic power supply in Nigeria pushed him and his team into it. He said that with support from sponsors, the team would produce consistent and cheapest alternating power supply for firms and households in the country.

The highlight of the event was the award of ₦100,000 cash prize to Wellington who emerged first and ₦50,000 to Samuel Ojile who came second with a presentation on Revamping Education. The other six participants received ₦20,000 each as consolation prizes.

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Us applications for jobless claims fall to lowest level in 9 weeks.

Associated Press

Fewer Americans applied for unemployment benefits last week as the labor market continues to hold up despite higher interest rates imposed by the Federal Reserve in its bid to curb inflation.

The Labor Department reported Thursday that unemployment claims for the week ending April 20 fell by 5,000 to 207,000 from 212,000 the previous week. That's the fewest since mid-February.

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The four-week average of claims, which smooths out some of the weekly up-and-downs, ticked down by 1,250 to 213,250.

Weekly unemployment claims are considered a proxy for the number of U.S. layoffs in a given week and a sign of where the job market is headed. They have remained at historically low levels since the pandemic purge of millions of jobs in the spring of 2020.

The Federal Reserve raised its benchmark borrowing rate 11 times beginning in March of 2022 in a bid to stifle the four-decade high inflation that took hold after the economy rebounded from the COVID-19 recession four years ago. The Fed’s intention was to loosen the labor market and slow wage growth, which it said contributed to persistently high inflation.

Many economists thought there was a chance the rapid rate hikes could cause a recession, but jobs have remained plentiful and the economy surged on strong consumer spending.

Last month, U.S. employers added a surprising 303,000 jobs , yet another example of the U.S. economy’s resilience in the face of high interest rates. The unemployment rate dipped from 3.9% to 3.8% and has now remained below 4% for 26 straight months, the longest such streak since the 1960s.

Though layoffs remain at low levels, companies have been announcing more job cuts recently , mostly across technology and media. Google parent company Alphabet, Apple , eBay, TikTok, Snap, Amazon, Cisco Systems and the Los Angeles Times have all recently announced layoffs.

Outside of tech and media, UPS , Macy’s, Tesla and Levi Strauss also have recently cut jobs.

In total, 1.78 million Americans were collecting jobless benefits during the week that ended April 13. That's 15,000 fewer than the previous week.

Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

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City of opportunity: 7 advantages to living in Moscow

1. Moscow never sleeps

The first advantage, and one that every single respondent mentioned, is the ability to buy anything and get any household service performed at any time of the day or night. “You can go to a bookstore at 2:00 in the morning, buy a lamp at a construction market at 3:00 in the morning, find flowers for your girlfriend at 5:00 in the morning, and get your car washed at 6:00 in the morning,” says American producer Bob Van Ronkel, who has lived in Moscow for more than a decade.

The only thing you can’t buy in Moscow in the middle of the night is alcohol. All the liquor shelves in stores are sealed off after 11:00 p.m.

2. Pay terminals for cell phone, internet, and utilities payments

You won’t find yourself without a cell phone signal in Moscow. The most crowded places – stores, underground pedestrian crossings, restaurants, pharmacies, the metro – all have round-the-clock pay terminals. “You just have to punch in your phone number, enter the amount of money you want, and your account is refilled. It also works for your internet account. It’s simple and convenient,” says Croatian programmer Ivan Vuckovic.

You don’t have to go to the bank to pay for utilities, either. The same pay terminals take payments for all possible accounts, taxes, and even speeding ticket fines. It is much more complicated in Europe. “In Croatia, for example, to pay your phone balance you have to buy a special card with a code at a kiosk, and you later have to enter that code into your phone. Naturally, the kiosk isn’t open 24 hours,” Vuckovic complains.

3. Vkontakte vs Facebook

Russian social network VKontakte is particularly popular among foreigners who speak Russian. The network contains a huge number of audio and video files in Russian [though most of these are illegal – RBTH]. Mexican Alejandro Ordonez is a developer of modern Russian-Mexican economic and cultural relations, so for him VKontakte is not only a way to virtually hang out with friends, but also a place where he can watch Russian films, TV shows, and series, as well as listen to music and study Russian online on professors’ profiles. “Even when I’m not in Russia, I don’t forget Russian,” Alejandro said. Foreigners who use Facebook have remarked that the Russian social network has many advantages; for example, it has none of the adverts that accompany the newsfeeds of Facebook users.

4. Text message alerts from the bank

Some Russians have ATM cards at Russian banks and are given the option of setting up bank alerts via text message. “In Croatia, that means that the client will get one text message a day about the state of his personal account,” says Vuckovic. In Moscow, clients get a text message about any operation made with their bank card. This means that they always know how much money they have in their account. It is also an effective way to combat fraud, because the client can contact the bank immediately after receiving a text message about a fraudulent removal of money from his card.

5. Yandex.Traffic

All foreigners are afraid of traffic jams in Moscow, but few are aware of an online service that shows the current state of the roads in real time. This app is so detailed that you can see if there is a traffic jam on even the tiniest street. “At first it was scary to see the completely red Yandex map, which means that there are traffic jams everywhere in the city. But then I understood that this only happens during rush hour. The app really helps me move around Moscow and find the time to move,” said Australian Michael Alexander, who has fallen in love with Russia after three months in Moscow.

6. Medication without a prescription

The majority of medications can be purchased in Russia without a prescription. Antibiotics, hormonal medications, potent antihistamines, and statins can all be bought without having to visit a doctor first. Foreigners consider this a major plus because they can avoid wasting time and money on visiting the doctor. However, we can’t call this an accomplishment, per se, because the number of people engaging in self-medication is increasing with each year. By trying to save money, they are often at risk of seriously harming themselves.

7. Marshrutki

Areas with large concentrations of people are serviced not only by trolleybuses, trams, and buses, but also by marshrutki , something like a minibus. On the outside a marshrutka looks like a minibus, but as a rule it doubles as public transport. It is relatively cheap to ride a marshrutka , and you will typically arrive at your destination much faster than by using other forms of public transport. The only drawback that foreigners have noticed is the poor noise insulation, which makes it so that you have to practically scream at the driver to say where you want to go. “The first time I got scared when my girlfriend suddenly screamed in the marshrutka . It was so embarrassing, but later I got used to it and now I scream myself,” says Enrique Alvarez.

Read more:  Literature lovers can visit Pushkin and Mayakovsky online

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