Education in States and Nations: 1991
(ESN) Indicator 26:
Unemployment and education
The unemployment rate measures the percentage of the labor force
aged 25 to 64
who are unable to find employment. If unemployment rates
decrease as the
level of educational attainment increases, higher levels of
education could be
considered worthwhile investments. In some economies, however,
this kind of
positive relationship between educational attainment and
employment may not be
as strong as in others, or it may not exist at all. Not all
countries or
states need their workforce to hold the same academic
credentials. Moreover,
even people with high levels of education and training may not
fare well in
the job market if there is not a current demand for their
particular skills.
- In most countries in 1991, lower unemployment rates were
associated
with higher levels of educational attainment. In the
United States,
the unemployment rate for people who did not complete high
school was
5.3 percentage points higher than that for those who
completed high
school. A large difference in unemployment rates between
those two
education levels (less than upper secondary and upper
secondary) also
existed in Canada (4.6 percentage points), but was not
quite as large
in France, Germany, or the United Kingdom (about 4
percentage points
each). In Italy, there was a slight difference in the
opposite
direction, with unemployment 1.5 percentage points higher
for the
upper secondary graduates than for those with less than
upper
secondary credentials.
- The difference in unemployment rates between those having
attained an
upper secondary and a university level of education was 2.9
percentage
points in the United States, about the same as in France.
Among the
G-7 countries represented here, Canada and the United
Kingdom had
larger differences (4.4 and 3.4 percentage points,
respectively).
Italy and Germany had smaller differences (2.2 and 2.1
percentage
points, respectively).
- The difference in unemployment rates between those having
attained an
upper secondary and a university level of education ranged
across the
states from about 1.5 percentage points in Hawaii and
Nebraska to over
5 percentage points in Alaska and West Virginia. The range
across the
countries was somewhat wider and lower - from -0.7
percentage points
in Switzerland to 4.9 percentage points in Finland.
Note on interpretation:
Unemployment rates are volatile measures, highly (negatively)
correlated with
business cycles. The United States' unemployment rate in
(October of) 1991
was higher than the unemployment rates in most of the states in
(April of)
1990 because unemployment tends to lag behind recessions. The
U.S. recession
occurred during the last two quarters of 1990 and the first
quarter of 1991.
U.S. unemployment averaged less than 7 million workers in 1990,
but almost 8.7
million in October 1991. The U.S. national unemployment rate was
5.3 percent
of all workers in April 1990 and 6.7 percent in October 1991.
Unemployment
did not peak in Western and Northern Europe until late 1993.
Table 25b 
Figure 26
