Why is the unemployment rate low in many developing countries?
Many developing countries do not have social protection schemes such as unemployment insurance and welfare benefits, so people simply cannot afford to be unemployed. In these countries, a low unemployment rate may not be a sign of a healthy labor market; the low rate belies the lack of job security and poor work conditions many people may face, particularly if workers are in the often large informal economy. References: “Employment and Unemployment in Mexico in the 1990s,” PDF (142K) by Gary Martin, Monthly Labor Review, November 2000, pp. 3-18. “Employment and Unemployment in Mexico’s Labor Force,” PDF (2,012K) by Susan Fleck and Constance Sorrentino, Monthly Labor Review, November 1994, pp. 3-31.
