Growth: An Essential Part of a Cure for Unemployment


By Davide Furceri and Prakash Loungani

(version in EspañolFrançais中文Русский,  عربي,  日本語)

Unemployment is a global problem. If the unemployed formed their own country, it would be the fifth largest in the world. Of the nearly 200 million people around the world looking for work, half are in emerging markets and about a quarter in advanced economies, reflecting the growing weight of emerging markets in the global labor force (Figure 1).

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Top Five Policy Priorities to Brighten America’s Economic Future


Deniz IganBy Deniz Igan

(version in Español)

There was a time in the not-so-distant past when science fiction could make us look forward to a better world. We had uplifting visions of the future in shows like Star Trek and Back to the Future. Today, the menu of options only offers a dystopian world ruined by poverty and violence (think The Hunger Games, Divergent, or Elysium).

It sure is easy to get pessimistic these days. Six years after the financial crisis, the recovery in the United States has been fragile and weaker than anything we have seen in the post-WWII period. Growth figures, in large part, have been serial disappointments, disrupted by government shutdowns, debt ceiling showdowns, or meteorologically-triggered slowdowns.

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Does Raising the Minimum Wage Hurt Employment? Evidence from China


Prakash LounganiBy Prakash Loungani

(version in 中文)

Raising the minimum wage is a polarizing issue. One side worries that raising it will lower employment. The other side downplays the impact on employment and plays up the positive impact on the living standards of the poor. Both sides are able to cling to their beliefs as the evidence, much of which comes from high-income (“advanced”) economies, is mixed.

The majority of the global labor force, however, is in the emerging markets. Moreover, for a number of these countries, instituting a minimum wage or raising it is squarely on the policy agenda. But little is known about the impacts of minimum wages on employment and living standards in emerging markets.

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A Tale of Two States—Bringing Back U.S. Productivity Growth


By Roberto Cardarelli and Lusine Lusinyan 

(Versión en español)

Today’s Pop Quiz: What do Oregon and New Mexico have in common? What could possibly link the spectacular vistas of Crater Lake to the glistening White Sands?

Answer: One link is these two states have the highest share of computer and electronic production in the entire United States. Think Intel in the Silicon Forest or Los Alamos. They also rank similarly in information technology usage by their businesses.

For Crater Lake: (photo: Eye Ubiquitous/Newscom)    For White Sands: (photo: Eye Ubiquitous/Newscom)

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U.S. Labor Force: Where Have All the Workers Gone?


Ravi BalakrishnanBy Ravi Balakrishnan

(Version in Español)

It’s not supposed to be this way. As the U.S. economy recovers, hirings increase and people are encouraged to look for jobs again. Instead, the ratio of the adult population with jobs, or looking for one—what’s called the labor force participation rate—has been falling, standing at 62.9 percent in July 2014 (Figure 1).

Figure 1

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Are Jobs and Growth Still Linked?


Prakash LounganiBy Prakash Loungani 

(Version in Español)

Over 200 million people are unemployed around the globe today, over a fifth of them in advanced economies. Unemployment rates in these economies shot up at the onset of the Great Recession and, five years later, remain very high. Some argue that this is to be expected given that the economy remains well below trend and press for greater easing of macroeconomic policies (e.g. Krugman, 2011, Kocherlakota (2014)). Others suggest that the job losses, particularly in countries like Spain and Ireland, have been too large to be explained by developments in output, and may largely reflect structural problems in their labor markets. Even in the United States, where unemployment rates have fallen over the past year, there is concern that increasing numbers of people are dropping out of the labor force, thus decoupling jobs and growth.

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More than 18 Million Jobs Needed!


By Masood Ahmed

(Version in عربي )

For the six oil-importing countries in the Middle East and North Africa region—Egypt, Jordan, Lebanon, Morocco, Syria, and Tunisia—high unemployment is a chronic problem. Unemployment rates here are among the highest worldwide. This can have enormous economic and social costs, with the potential for what the IMF Managing Director has described as a ‘lost generation’ of unemployed.

Figures for these six countries in the region, outlined in our October 2010 Regional Economic Outlook, are staggering. Continue reading

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