Purpose – We aim to empirically analyse the relationship between public debt and unemployment, shedding light on the debate of three different schools of thought (Keynesian, neoclassical and neo-Keynesian) and offer a comprehensive understanding of the global debt-unemployment dynamic.

Design/methodology/approach – We suitably employ fixed and random effects estimation, as well as the dynamic two-step system GMM (SGMM) using a panel of 162 countries divided into four continental groups—Africa, the Americas (North and South collectively), Asia Pacific (Asia and Oceania collectively), and Europe, covering the period 1996-2022.

Findings – A 1% increase in central government debt corresponds to a 2% rise in global unemployment. Region-specific findings indicate a 6.1% increase in unemployment in Europe and a 0.9% rise in Africa. In contrast, the coefficients for the Americas and Asia Pacific are not statistically significant, with magnitudes close to the global estimates. Dynamic estimation reveals that public debt is a significant predictor of unemployment in all regions, with Europe experiencing the most pronounced effect. Specifically, a 1% increase in debt levels is projected to increase unemployment by 0.8% in Africa, 0.6% in the Americas, and 1.6% in Europe, while the global projection estimates a robust 2.6% rise.

Originality/value – This study enhances the literature by providing empirical insights into the relationship from a comprehensive global perspective. Through a comparative analysis of different continents, we explore the varying dynamics of this relationship, allowing for a nuanced understanding of regional disparities.