Unemployment decreased and employment increased in 2014

According to Statistics Estonia, the unemployment rate was 7.4% and the employment rate was 63% in 2014. Unemployment has decreased and employment has increased since 2011, but these changes have gradually slowed down.

In 2014, the annual average number of unemployed persons was 50,000, which is 9,000 less compared to the previous year. The annual average unemployment rate (7.4%) was 1.2 percentage points lower than in 2013 (8.6%). Compared to the highest unemployment rate of the last decade (16.7% in 2010), unemployment has decreased more than twice. In 2014, the unemployment rate in Estonia was relatively low, compared to other European Union countries.

The decrease in unemployment continued at the end of 2014. In the 4th quarter of 2014, the unemployment rate was 6.3% and the estimated number of unemployed persons was 43,000 (which was, respectively, 2.4 percentage points and 16,000 persons less than in the 4th quarter of 2013).

The long-term unemployed (i.e. people who had been looking for a job for one year or longer) numbered 23,000 in 2014, of which those who had been looking for a job for at least two years numbered 12,000. Compared to the previous year, the number of the long-term unemployed decreased by 14% (the number of those who had been looking for a job for at least two years decreased by 25%) and the number of the short-term unemployed (i.e. people who had been looking for a job for under a year) decreased by 17%. The long-term unemployment rate was 3.3% in 2014.

The youth unemployment rate (i.e. the share of unemployed persons aged 15–24 among the labour force of the same age) was 15.0% in 2014 (18.7% in 2013). Although unemployment decreased faster among young people compared to other age groups, the youth unemployment rate was still two times higher than the total unemployment rate. The demographic decrease in the size of the youth population facilitates the decrease in youth unemployment (the size of the age group 15–24 has decreased by more than a quarter in the last ten years). In 2014, the young unemployed numbered 8,000 in total. The unemployment rate of 15–24-year-olds is calculated as a share of only those young people who are economically active (i.e. employed or unemployed), but most members of this age group are still studying. As a result, the share of the unemployed among all young people aged 15–24 was only 5.7%.

The labour market is facing structural changes, resulting in an increase in the number of older employed persons and a decrease in the number of younger employed persons. During the last ten years (2004–2014) the number of older employed persons (aged 50–74) increased by 39,000, whereas the number of young employed persons (aged 15–24) and the number of employed persons in middle working age (aged 25–49) both decreased by 8,000.

In 2014, the employment rate of the population aged 15–74 was 63.0%, which is close to the level seen during the last economic boom. The unemployment rate increased by 0.9 percentage points compared to 2013. In the 4th quarter, the employment rate of the population aged 15–74 was even higher at 63.6%, which is two percentage points higher compared to the 4th quarter of 2013. In addition to the economic growth, various factors contributed to the increase in the employment rate, including the decline in population, the unequal size of population groups, the gradual increase in retirement age, etc. As the size of the population declines, there are fewer persons competing for the same number of jobs, which leads to a fall in unemployment and a rise in the employment rate. In the context of the decline in the working-age population, the annual average number of employed persons increased modestly (by 3,500) compared to 2013,  and totalled 625,000 in 2014. As the size of the population has constantly declined since the previous economic boom, the number of employed persons in 2014 was 5% (i.e. by 33,000 persons) smaller, compared to the peak in the labour market in 2007.

The yearly change in employment was most of all influenced by an increase in the number of persons employed in information and communication, accommodation and food services, retail trade, health, and transportation and storage (postal and courier activities), as well as by a decrease in the number of persons employed in agriculture, manufacturing and financial and insurance activities.

The employment rate of the population aged 20–64, which is a Europe 2020 indicator, was 74% in 2014. After the economic crisis, the employment rate has been gradually moving towards the target level set for Estonia –76%.

Economically inactive persons (students, retired persons, homemakers, discouraged persons, etc.) made up 32% (317,000 persons) of the population aged 15–74 in 2014, which was 3,000 less than the year before. Among inactive persons, the number of pensioners and persons inactive due to studies decreased the most. The number of persons inactive due to health problems increased. Discouraged persons, i.e. persons who have stopped seeking a job, numbered 6,000 in 2014 (their number grew to 7,000 in the 4th quarter).Diagram: Number of employed persons

The unemployment rate is the share of the unemployed in the labour force (the sum of employed and unemployed persons). The long-term unemployment rate is the share of people who have been unemployed for a year or longer among the total labour force. The employment rate is the share of the employed in the working-age population (aged 15–74). The estimates are based on the data of the Labour Force Survey.

Statistics Estonia has been conducting the Labour Force Survey since 1995 and every quarter 5,000 persons participate in the survey. The Labour Force Survey is carried out by statistical organisations in all the European Union Member States on the basis of a harmonised methodology.

Starting from the 1st quarter of 2015, Statistics Estonia will not publish the quarterly Labour Force Survey data on economic activities and occupations; the respective data will be published once a year. Statistics Estonia will continue to publish quarterly employment data by economic activity as part of business statistics, national accounts statistics and the statistics on job vacancies and labour turnover.

Source: Statistics Estonia
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