The highest and lowest unemployment rates in the world vary dramatically, even among the world's largest economies.
Key Takeaways
- Unemployment typically measures individuals in the labor force, meaning those who are not working but are actively seeking work.
- The countries with the lowest unemployment rates are Qatar, Cambodia, and Niger.
- A low unemployment rate does not mean a nation's citizens are well-off; the standard of living is determined by GDP per capita.
- The countries with the highest unemployment rates include South Africa, Djibouti, and Eswatini.
Impact of COVID-19
Unemployment in the United States, the largest economy as measured by gross domestic product (GDP), was 3.5% at the end of February. 2020—the lowest rate in half a century—but quickly rose to 14.7% by April at the start of the COVID-19 pandemic and its economic impact.
By way of comparison, Investopedia's historical research shows that the average U.S. annualunemployment rate from 1949 through 2019was 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. The unemployment rate decreased every month after the start of the pandemic—except for small, intermittent increases through May 2023. As of December 2023, the unemployment rate was 3.7%.
Uneven Recoveries
Economic recovery wasn't experienced equally by all countries. Several nations posted unemployment rates just as bad, if not worse, in the wake of the pandemic than they were before it began.
Below are the countries with the highest and lowest unemployment rates, in addition to the unemployment rates of the world's largest economies (ranked by GDP), according to the most recently available data from the World Bank.
Highest Unemployment Rates
The world's five highest unemployment rates at the end of 2022 (latest information) were in Africa and occupied Palestine.
- South Africa: 29.8%
- Djibouti: 27.9%
- West Bank and Gaza: 25.7%
- Eswatini: 24.4%
- Republic of Congo: 21.8%
South Africa had one of the highest unemployment rates in the world in 2022. It's also the richest country in this grouping. The World Bank estimated its GDP per capita to be $6,776.5 in 2022.
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." After recovering in 2021, its economic activity slowed in 2022. GDP growth of 5.1% and 5.7% is forecast for 2024 and 2025, respectively.
The Palestinian territories of the West Bank and Gaza are currently facing an unsustainable economic situation. The Palestinian economyfelt 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. As COVID-19 waned, economic activity strengthened in 2021 and real GDP grew 7%. It continued in 2022 with real GDP growth of 3.9%. Lower growth is expected for 2023, especially due to the war in Gaza.
Eswatinisuffersfrom 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 losemanpower to the disease. The GDP growth rate for 2022 was 3.9%.
Republic of Congo, in Central Africa, has a population of 5.7 million people, 47% of whom are under the age of 18. While economic activity increased by 1.5% in 2022, it wasn't enough to reduce the number of people existing in extreme poverty. The country's oil production makes up about half of its GDP and 80% of exports. GDP is projected at 3.2% in 2023.
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 countries with the world's 10 lowest unemployment rates at the end of 2022:
- Qatar: 0.1%
- Cambodia: 0.4%
- Niger: 0.5%
- Thailand: 0.9%
- Burundi: 1.0%
- Bahrain: 1.4%
- Chad: 1.4%
- Cuba: 1.4%
- Solomon Islands: 1.5%
- Benin: 1.7%
The above countries have stunning unemployment rates. All bested the U.S. by a considerable margin at the end of 2022.
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 2022, with some outliers such as India, France, and Italy.
- United States: 3.6%
- China: 4.9%
- Japan: 2.6%
- Germany: 3.0%
- India: 7.3%
- United Kingdom: 3.6%
- France: 7.4%
- Russian Federation: 4.7%
- Canada: 5.2%
- Italy: 8.1%
10 million
The number of people in the U.S. who lost their jobs within two weeks at the end of March 2020, according to the Department of Labor.
Unemployment Rates and Economic Strength
Having a low unemployment rate does not mean a country's economy necessarily is strong. For instance, in 2022 Niger had only 0.5% unemployment and a GDP per capita of $585.4, according to the World Bank. In 2022, Burundi had 1.0% unemployment and a GDP per capita of $259.0.
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 $2,054.4 in 2022,still employed 58% of its workforce in agriculture in 2021.
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, the GDP per capita in Qatar was $87,661.5in 2022.
That wealth helps its standing in the low unemployment listed above, 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. However, it's been making a sustained push to diversify into technology, marketing, construction, restaurants, and hotels.
What Is the Global Unemployment Rate?
The International Labor Organization determined that the global unemployment rate for 2022 was 5.8%. That remains above 2019's rate of 5.4%. Global unemployment is projected to grow by 1.0% in 2023.
What Is Not Included in the U.S. Unemployment Rate?
The unemployment rate only takes into consideration the labor force. The labor force consists of those individuals who are currently working and those who 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 U.S. Unemployment Rate?
The unemployment rate in the U.S. as of December 2023 is 3.7%. This is flat 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 emerged from the pandemic, employment conditions improved. However, the world still faces challenges that include inflation, ongoing global supply chain problems, and a war in Europe that has impacted food supplies around the world.
