The highest and lowest unemployment rates in the world vary dramatically, even among the world's largest economies. And low unemployment does not necessarily mean a wealthy nation. Read on to discover the highest and lowest unemployment rates in the world as well as how they compare to the 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 Eswatini, South Africa, and Djibouti.
Impact of COVID-19 and Inflation
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 the world recovered from COVID, high inflation took shape in the global economy due to a variety of factors, such as supply chain issues caused by the pandemic. As inflation increases, central banks raise interest rates to reduce it, which is what happened in the U.S. Increasing rates slows the economy, which also increases unemployment.
As of July 2024, the unemployment rate was 4.3%, a number that has steadily been increasing from 3.5% in August 2023.
Unemployment Rates
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 2023 (latest information) were in Africa and occupied Palestine.
- Eswatini: 37.6%
- South Africa: 28%
- Djibouti: 26.3%
- West Bank and Gaza: 24.4%
- Botswana: 23.4%
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 losehuman capital to the disease. The GDP growth rate for 2023 was 4.8%.
South Africa had one of the highest unemployment rates in the world in 2023. It's also the second-richest country in this grouping as measured by GDP per capita. The World Bank estimated its GDP per capita to be $6,253.2 in 2023.
Djibouti benefits from its location on the Red Sea, making it a bridge between Africa and the Middle East. Its economy is primarily driven by its port complex, which is one of the most advanced in the world. Its economy slowed in 2022 but rebounded significantly in 2023 with a GDP growth rate of 6.7%.
The Palestinian territories of the West Bank and Gaza are currently facing an unsustainable situation due to the war in Gaza with Israel. GDP growth in 2023 was -5.5%. The number for 2024 is expected to be much lower given the catastrophic amount of destruction and death brought on the region and the Palestinian people since the start of the war.
Botswana is located in Southern Africa and benefits from diamond wealth, strong institutions, a small population, and smart economic management. It is the richest country in this category as measured by GDP per capita, which was $7,249.8 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 lowest unemployment rates at the end of 2023:
- Qatar: 0.1%
- Cambodia: 0.2%
- Niger: 0.6%
- Thailand: 0.9%
- Burundi: 0.9%
- Chad: 1.1%
- Bahrain: 1.2%
- Cuba: 1.2%
- Lao PDR: 1.2%
- Benin: 1.5%
The above countries have stunning unemployment rates. All bested the U.S. by a considerable margin at the end of 2023.
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 2023, with some outliers such as Brazil, France, and Italy.
- United States: 3.6%
- China: 4.7%
- Germany: 3.0%
- Japan: 2.6%
- India: 4.2%
- United Kingdom: 4.1%
- France: 7.3%
- Italy: 7.6%
- Brazil: 8.0%
- Canada: 5.4%
$27.36 Trillion
U.S. GDP at the end of 2023.
Unemployment Rates and Economic Strength
Having a low unemployment rate does not mean a country's economy necessarily is strong. For instance, in 2023, Niger had only 0.6% unemployment and a GDP per capita of $618.3, according to the World Bank. In 2023, Burundi had 0.9% unemployment and a GDP per capita of $199.6.
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 $2,075.4 in 2023,still employed 70% of its workforce in agriculture in 2022 (latest information).
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 $87,480.4in 2022 (latest information).
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?
According to the World Bank, the global unemployment rate was 5% in 2023. This was an improvement from 5.3% in 2022.
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 July 2024 was 4.3%. This is an increase from 4.1% 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.
