What is unemployment?
Unemployment means people who are able to work, ready to work and actively looking for work, but cannot find it. Not having a job is not enough to count as unemployed. A student who is studying, a homemaker who is not currently looking for work, or a retired person who does not want work are not counted as unemployed.
The unemployment rate is the percentage of the labour force that is unemployed. The labour force means the people who are working plus the people who are looking for work.
Say a family has four adults. The father runs a shop, the mother is a homemaker and is not looking for work, the elder son has been job-hunting for three months since graduating, and the younger daughter is at university. In the statistics, two are in the labour force (the father and the son), and one of them is unemployed. The family’s “unemployment rate” is 50%, even though only one of the four is unemployed. The example is hypothetical.
Why it matters to an investor
- To read the economy: when unemployment rises, incomes and spending fall, and many businesses’ sales and profits come under pressure.
- To see your own risk: losing a job is one of the biggest shocks to personal finances. How large an emergency fund you need depends a lot on how secure your work is.
- To understand credit risk: when unemployment rises, people struggle to pay instalments, which can push up bad loans at banks and finance companies.
- To understand policy: decisions on interest rates and the government budget weigh employment alongside growth and inflation.
How it is measured in Bangladesh
In Bangladesh, unemployment is measured by the Bangladesh Bureau of Statistics (BBS) through the Labour Force Survey (LFS). Selected households across the country are interviewed, and the national figure is estimated from them. BBS publishes both quarterly and annual results.
The definition follows the International Labour Organization (ILO) standard: did no paid work for even one hour in the past seven days, is ready to work, and has been looking for work over the past month. In other words, one hour of paid work in a week is enough to be counted as “employed”.
In Bangladesh in recent years
According to BBS’s Labour Force Survey, the annual unemployment rate was 3.53% in 2022, 3.35% in 2023 and 3.66% in 2024. In 2024 about 2.6 million people were unemployed, with the urban rate (4.40%) higher than the rural rate (3.40%).
Rates are much higher among young people. On World Bank figures (modelled ILO estimates), unemployment among 15–24-year-olds was roughly between 8% and 11% from 2022 to 2025, two to three times the national rate. These figures change over time; BBS publishes the latest numbers.
A low rate does not mean all is well
- Informal work: in the 2022 Labour Force Survey, about 84.9% of working people were in informal employment, which usually means no written contract, regular salary or retirement benefits.
- Underemployment: someone who wants full-time work but gets only a few hours a week, or whose job is far below their qualifications, is not counted as unemployed.
- Giving up the search: people who stop looking after trying for a long time drop out of the labour force, which can actually make the rate look lower.
Worked example
- Say an area has 1,000 working-age people. Of these, 400 are students, homemakers or retirees who are not looking for work.
- The other 600 are in the labour force. Of them, 570 are working and 30 are looking for work but cannot find it.
- Unemployment rate = 30 ÷ 600 = 5%. (Dividing by 1,000 would wrongly give 3%.)
Result: now say 10 people give up looking. The labour force is 590, the unemployed 20, and the rate falls to about 3.4%, yet nobody found a new job. The numbers are only an example.
Common mistakes
- Assuming “the unemployment rate is low, so the job market is fine”, without looking at informal work and underemployment.
- Thinking the rate is a share of the whole population. It is a share of the labour force only.
- Treating your own job as permanent and keeping no emergency fund.
- Judging the risk in your own field from the national average. The picture differs a lot by age, education, area and sector.
When you see the unemployment rate, also look at who is counted and who is not: the youth rate, informal work and people who have stopped looking.