Unemployment in becoming a big problem especially in the developing countries such as Tunisia and the Middle East and North Africa (MENA) region.

1. UNEMPLOYMENT
IN THE WORLD
Mahdi Sellami, Oumeima Gammoudi, Khalil Kachti, Soulaimen Ben Salah, Radouane Baccouche

2. Outline
I. Definitions
II. Unemployment in The World
III. Unemployment in Tunisia
IV. Causes of Unemployment
V. Effects of Unemployment on Economy
VI. How to Decrease Unemployment
VII. Unemployment Policies in Tunisia

3. I. Definitons
Unemployment:
Unemployment is a phenomenon that occurs when a person
who is actively searching for employment is unable to find
work. Unemployment is often used as a measure of the wealth
of the economy. The most frequent measure of unemployment
is the unemployment rate, which is the number of unemployed
people divided by the number of people in the labor force.
http://www.investopedia.com/terms/u/unemployment.asp#ixzz4e3O70oNl

4. …
Frictional unemployment:
Occurs when workers spend time searching for the
jobs that best suit their skills and tastes. Short-term for
most workers.

5. Structural unemployment:
• Occurs when there are fewer jobs than workers.
• Usually longer-term.
• Occurs when wages are kept above the equilibrium.
• There are 3 reasons for above eq’m wage:
1) Minimum-Wage Laws
2) Unions
3) Efficiency Wages
…

6. Cyclical unemployment:
• Cyclical unemployment comes around
due to the business cycle itself.
Cyclical unemployment rises during
periods of recession and declines
during periods of economic growth.
…
http://www.investopedia.com/terms/u/unemployment.asp#ixzz4e3O70oNl

7. II. Unemployment in The World
Global Unemployment:
• Report says that Global unemployment to rise by 3.4
million in two years.
• International Labor Organization predicts joblessness
will surpass 200 million by end of 2017 for the first
time on record.
http://professorfernando2015.blogspot.com/2015/02/aula-de-geografia-11022015-
mapas.html
https://www.theguardian.com/business/2016/jan/19/global-unemployment-3-million-rise-next-
two-years-international-labour-organization-report

8. Total Unemployment In The World
http://data.worldbank.org/indicator/SL.UEM.TOTL.ZS?end=2014&start=1991

9. II. Unemployment in The World
Unemployment: The Highest Rates (Statistics from Dec 28, 2015)
• A number of factors including the economy, technological
advances, and seasonal fluctuations affect a country’s
employment situation.
• The five countries with the highest unemployment rate are:
1. South Africa (25.50%)
2. Greece (24.62%)
3. Spain (21.18%)
4. Iraq (16.00%)
5. Egypt (12.80%)
https://www.forbes.com/sites/mikepatton/2015/12/28/the-five-highest-unemployment-rates-in-the-world/#a872c7240a5f

10. II. Unemployment in The World
“A high unemployment rate is often the
result of a slow economy. As economic
activity improves, companies require
additional workers, and unemployment
falls”.
Mike Patton, Forbes Magazine

11. II. Unemployment in The World
• “More than 3 million people will become unemployed
worldwide in the next two years, which will leads to
social unrest as the global economy slows.”.
• “The International Labor Organization predicts
unemployment will rise by about 2.3 million this year
to 199.4 million, and that 1.1 million will be added to
the global count in 2017, taking joblessness to more
than 200 million for the first time on record”.
https://www.theguardian.com/business/2016/jan/19/global-unemployment-3-million-rise-next-two-years-international-labour-organization-report

12. II. Unemployment in The World
Guy Ryder, the ILO director general, said:
“Many working women and men are having to
accept low-paid jobs, both in emerging and
developing economies, and also increasingly in
developed countries. Despite a drop in the number of
unemployed in some EU countries and the US, too
many people are still jobless. We need to take urgent
action to boost the number of decent work
opportunities or we risk intensified social tensions”.
http://www.coordination-allaitement.org/index.php/actualites/actualites-diverses
https://www.theguardian.com/business/2016/jan/19/global-unemployment-3-million-rise-next-two-years-international-labour-organization-report

13. III. Unemployment in Tunisia
http://www.tradingeconomics.com/tunisia/unemployment-rate
FROM 2014 TO 2017

14. Interpretation:
Unemployment Rate in Tunisia remained unchanged at 15.50 percent in the
fourth quarter of 2016 from 15.50 percent in the third quarter of 2016.
Unemployment Rate in Tunisia averaged 15.35 percent from 2005 until 2016,
reaching an all time high of 18.90 percent in the fourth quarter of 2011 and a
record low of 12.40 percent in the fourth quarter of 2007.
http://www.tradingeconomics.com/tunisia/unemployment-rate
III. Unemployment in Tunisia

15. III. Unemployment in Tunisia Year
Unemploy
ment rate
Percent
Change
2000 15.691 -1.82 %
2001 15.126 -3.60 %
2002 15.263 0.91 %
2003 14.514 -4.91 %
2004 14.237 -1.91 %
2005 12.819 -9.96 %
2006 12.511 -2.40 %
2007 12.397 -0.91 %
2008 12.442 0.36 %
2009 13.29 6.82 %
2010 13.048 -1.82 %
2011 18.889 44.77 %
2012 16.723 -11.47 %
2013 15.33 -8.33 %
2014 15.3 -0.2
Unemployment rate in Tunisia between 2000 and 2014
More details…
http://www.indexmundi.com/tunisia/unemployment_rate.html

16. People can be unemployed for many reasons:
 Their company reduced the work force, and they are seeking a new position. This can be due to a local
condition, when the company closes a plant or division, or a national condition, when the economy
slows and many companies reduce their work force.
 They have recently returned to the work force - perhaps from pregnancy or attending school - and
haven't yet located a position.
 The need for their skill set has gone down, and there are limited positions available, which may lead to
unemployment until they train for a new position.
IV. Causes of Unemployment
http://study.com/academy/lesson/what-is-unemployment-definition-causes-effects.html

17. …
 Technology has reduced the need for their type of position.
 They quit their position and are looking for a new one.
 They were laid off due to lack of work and haven't yet been
rehired.
IV. Causes of Unemployment
http://study.com/academy/lesson/what-is-unemployment-definition-causes-effects.html

18. V. Effects of Unemployment on Economy
Effects of Unemployment on those 4 variables:
1. Unemployment financial costs
2. Spending power of the unemployed
3. Reduced spending power of the employed
4. Recession

19. Unemployment financial costs:
“The government and the nation suffer. In many countries the government has to pay
the unemployed some benefits. The greater the number of the unemployed or the
longer they are without work the more money the government has pay.
Therefore, the nation not only has to deal with the lost income and decreased
production but also with additional cost”.
V. Effects of Unemployment on Economy
http://www.job-interview-site.com/the-effects-of-unemployment-on-society-and-the-economy.html

20. Spending power of the unemployed:
“The spending power of an unemployed person
and his/her family decreases and they would rather
save than spend their money, which in turn affects
the economy adversely”.
V. Effects of Unemployment on Economy
http://www.job-interview-site.com/the-effects-of-unemployment-on-society-and-the-economy.html

21. Reduced spending power of the employed:
“Increased taxes and the insecurity about their own work may affect the spending
power of the working people as well and they will start to spend less than before”.
V. Effects of Unemployment on Economy
http://www.job-interview-site.com/the-effects-of-unemployment-on-society-and-the-economy.html

22. Recession:
“With the increase rates of unemployment other economy
factors are significantly affected, such as: the income per
person, health costs, quality of health-care, standard of
leaving and poverty”.
V. Effects of Unemployment on Economy
http://www.job-interview-site.com/the-effects-of-unemployment-on-society-and-the-economy.html

23. • Boosting human capital - education and
training - a long run strategy to make the
workforce more employable and to raise the
level of labor productivity.
• Lower employment taxes to increase labor
demand - for example, a reduction in national
insurance contributions.
VI. How to Decrease Unemployment
http://globalflare.com/georgias-new-bill-would-
lower-taxes-and-create-14000-new-jobs/https://www.tutor2u.net/economics/reference/unemployment-policies-to-reduce-unemployment

24. • Increasing demand from both the public and private sector -
keeping aggregate demand high to drive the creation of new
jobs:
 Extra spending on new roads, housing and other
infrastructure projects will lead to a strong positive
multiplier effect on output, incomes and jobs.
 A Keynesian-style stimulus (during a recession.) This
might include increases in state investment spending or
lower taxes to boost disposable income.
VI. How to Decrease Unemployment
https://www.tutor2u.net/economics/reference/unemployment-policies-to-reduce-unemployment

25. • Improved export competitiveness to provide
an injection of demand into the circular flow
of income.
• Improving work incentives - making work pay
to reduce benefit dependency and expand the
size of the labor supply.
VI. How to Decrease Unemployment
http://xcelsiorinternational.com/export-management/
https://www.tutor2u.net/economics/reference/unemployment-policies-to-reduce-unemployment
https://www.gohealthvmo.com/agent-benefits/incentives/

26. According to World Bank:
• Critical reforms are needed because Tunisia’s dismal real
GDP growth rate—forecast at just 1% for 2015—needs
fixing.
• Since 2011, unemployment in Tunisia has largely been
reduced by adding tens of thousands more jobs to the
public sector. However, this has placed immense,
unsustainable pressure on the national budget.
World Bank Statistics (May 2016)
VII. Unemployment Policies In Tunisia
http://www.worldbank.org/en/news/feature/2016/05/20/tunisia-moves-to-modernize-its-social-protection

27. VII. Unemployment Policies In Tunisia
• - 37% of Tunisia’s population of 11 million contributes to pension payments
- 50% of the population is covered by health insurance
- No unemployment benefits for people who lose their jobs.
- 23% have benefits, less than half (40%) of them are among Tunisia’s poorest people.
The latest estimates suggest that:
- 40% of the population is officially living below the national poverty line.
- Benefits are often 21% of total income.
But the absence of clear protocols to ensure accurate targeting and active policies to promote living
standards and jobs remain a obstacle for low-skilled individuals.
http://www.worldbank.org/en/news/feature/2016/05/20/tunisia-moves-to-modernize-its-social-protection

28.  In the short-term, Tunisia has to make active labor
market programs to respond to local needs and low-
skilled households better through public private
partnerships.
VII. Unemployment Policies In Tunisia

29.  In the mid-term, strengthen governance and institutions
by making active labor market programs, social safety
nets, pensions, health insurance, and future
unemployment benefits.
VII. Unemployment Policies In Tunisia
https://www.hrw.org/report/2011/12/16/tunisias-repressive-laws/reform-
agenda
http://www.worldbank.org/en/news/feature/2016/05/20/tunisia-moves-to-modernize-its-social-protection

30.  In the long-term, strengthen the financial position of the
country and decrease it dependence on other
international institutions(e.g. IMF). Moreover the
government has to switch universal subsidies to more
productive investments that can stimulate job creation
and improve human capital.
http://www.worldbank.org/en/news/feature/2016/05/20/tunisia-moves-to-modernize-its-social-protection
VII. Unemployment Policies In Tunisia
http://www.imf.org/external/index.htm
https://www.usip.org/publications/2015/11/tun
isia-economic-crisis-threatens-political-
progress

31. References
http://www.investopedia.com/terms/u/unemployment.asp#ixzz4e3O70oNl
https://www.theguardian.com/business/2016/jan/19/global-unemployment-3-million-rise-next-two-years-
international-labour-organization-report
http://data.worldbank.org/indicator/SL.UEM.TOTL.ZS?end=2014&start=1991
https://www.forbes.com/sites/mikepatton/2015/12/28/the-five-highest-unemployment-rates-in-the-
world/#a872c7240a5f
http://www.tradingeconomics.com/tunisia/unemployment-rate
http://www.indexmundi.com/tunisia/unemployment_rate.html
http://study.com/academy/lesson/what-is-unemployment-definition-causes-effects.html
http://www.job-interview-site.com/the-effects-of-unemployment-on-society-and-the-economy.html
https://www.tutor2u.net/economics/reference/unemployment-policies-to-reduce-unemployment
http://www.worldbank.org/en/news/feature/2016/05/20/tunisia-moves-to-modernize-its-social-protection