US | HOWARD F ROSEN

While the rate of unemployment in the US has decreased in recent decades, currently standing at around 5%, the length of time that people remain out of work has risen. The median duration of unemployment is now more than double what it was in the 1960s: 8.3 weeks as opposed to 3.7 weeks. In addition, the link between unemployment and the business cycle has weakened. All of this suggests that the underlying nature of the US labour market has changed, featuring higher levels of permanent job loss, along with more part-time and casual work and self-employment.

The US Unemployment Insurance (UI) system was established in 1935 and is financed by federal and state taxes. The level of assistance varies widely across the 53 programmes, because each state and territory sets its own programme parameters: Puerto Rico has the lowest maximum benefit of $133 a week while the highest is Rhode Island with $615 a week.

For most states, benefits represent between a third and half of average weekly earnings. The maximum duration for benefits in all states is around six months. Only a third of the total number of unemployed people get help from the programme and, on average, about a third of UI recipients exhaust their benefits before finding new jobs.

In my view, the UI system needs to be reformed in order to respond to current labour market conditions, by expanding eligibility to cover part-time workers, raising the amount of benefits to at least half of lost earnings, and creating private unemployment accounts for the self-employed.

Howard F Rosen is a Visiting Fellow at the Peter G Peterson Institute for International Economics in the US

JAPAN | DR ATSUSHI SEIKE
At the moment, the unemployment rate in Japan is 4%. This is slightly higher than the current balanced unemployment rate of 3.8%,where job openings and potential applicants are almost the same, so it’s not bad. But it is far higher than Japan’s historically low unemployment before the mid 1990s. A third of those who are unemployed are without jobs for less than three months, a third are without work for between three and 12 months, and a third remain unemployed for over a year.

To qualify for benefits the unemployed must be able to show the government that they are looking for a job. The level of benefits then depends on the person’s level of pay over the previous six months. It is typically between 50% and 80% of the average daily wage.

The maximum time benefits are paid is 330 days and this depends upon the recipient’s age and the number of years of contributions that they have made. Because the current rate of unemployment is relatively high compared to rates in the past, the Japanese government is providing more help to the unemployed. There are incentive schemes providing subsidies to employers taking on the unemployed and schemes to encourage the unemployed person to find a new job.

Dr Atsushi Seike is a Professor of Labour Economics at Keio University in Japan

NORWAY | KNUT RØED
The unemployment rate in Norway is now at a historically low level of 2.7%. Around 30% of those people have been unemployed long-term, meaning that they have been out of work for more than a year.

This low level of unemployment is largely a result of the favourable business cycle conditions now prevailing in Norway. However, by international standards, Norwegian unemployment rates tend to be low even during economic slumps, and the rate of unemployment has never exceeded 6%. One of the main reasons for this success is the flexibility in the level of real wages, obtained through relatively centralised wage bargaining arrangements. Another factor is the country’s active labour market policies, which ensure that most long term unemployed workers participate in various training and employment schemes.

Unemployed workers receive up to 62.4% of their previous earnings in unemployment benefits, for a maximum period of two years. After that, some of those who are still unemployed are entitled to other types of benefits. Benefit payments can be terminated if the job seeker does not actively search for work or if he/she refuses to accept suitable job offers or to take part in back-towork programmes.

Knut Røed is a Senior Research Economist at the Ragnar Frish Centre in Norway