Labour participation up further in January

Nearly 4.1 million people did not have paid work for a variety of reasons. In addition to the unemployed mentioned earlier, there were over 3.7 million people who had not looked or/nor been immediately available for work recently. They are not included in the labour force. Their number dropped by an average 11 thousand per month over the previous three months. At the end of January, the Employee Insurance Agency (UWV) recorded 279 thousand current unemployment (WW) benefits.

Unemployment indicator

In order to enable comparison of cyclical developments in the labour market between countries, the unemployment indicator of the International Labour Organisation (ILO) is often taken as a measure. According to this indicator, the ‘unemployed’ includes all 15 to 74-year-olds who do not have paid work but who have been looking for paid work recently and who are immediately available. There were 329 thousand unemployed in January, equivalent to 3.6 percent of the labour force. This is the same as in the previous month.

UWV: Increase in WW benefits due to year-end effect and seasonal influences

Just as in previous years, the number of current WW benefits increased slightly during the first month of this year compared to the previous month. This is because, traditionally, many labour contracts expire at year-end. In addition, there is less economic activity in certain sectors during winter, resulting in lower levels of employment. As a result, the number of WW benefits stood at 279 thousand in January 2019, i.e. an increase of 6.2 percent. Compared to January 2018, however, the total number dropped by 16.7 percent.

Because a person may receive more than one WW benefit, the number of WW benefit recipients had reached 271 thousand by the end of January. More than half of them (54.1 percent) have been receiving a WW benefit for less than six months. Around three in ten recipients (29.0 percent) have been receiving their benefit for over a year.

UWV: Strongest annual decrease seen in construction, care and retail trade

As mentioned earlier, the increased number of current WW benefits in January 2019 is for a large part the result of seasonal effects. Compared to the previous month, the sharpest increase was seen in construction (+22.6 percent), the temp sector (+17.6 percent) and in agriculture, greenery and fisheries (+10.5 percent). Compared to January 2018, however, construction (-29.8 percent) and the temp sector (-20.0 percent) were among the four sectors with the largest decline, together with health and care (-22.3 percent) and retail trade (-21.5 percent).

Labour participation up further

Net labour participation increased to 68.6 percent in January. The percentage share of people aged 15 to 74 years in paid work was never this high. The latest peak in February 2009 showed a labour participation rate of 68.3 percent. Among both young people aged 15 to 24 and the over-45s, the labour participation rate is higher than at the start of 2009. The highest rate is seen among 25 to 44-year-olds, but it has not yet reached the level of early 2009.

Unused labour potential

Every month, CBS publishes figures on the size of the employed labour force and the non-employed population. The latter group comprises the unemployed labour force as well as people not included in the labour force (all these groups follow the ILO definition).

However, the unemployed labour force does not represent all unused labour potential. According to the ILO indicator, this includes other groups of people aside from the unemployed. These people have either looked for work recently or are immediately available for work. They are counted towards the unused labour potential but fall outside the scope of the ILO definition of employment. People who work part-time but want to work more hours and are immediately available are also included in the unused labour potential.

These groups are only reported on every quarter in terms of size and composition. The overall picture provided in the table below is based on the latest quarterly figures (Q4 2018). The total unused labour potential in Q4 2018 comprised slightly more than 1.0 million people. This was still over 1.2 million one year previously. Development of the total unused labour potential closely follows developments in unemployment according to the ILO definition.

Every month, CBS publishes figures on the labour force in accordance with international guidelines. The corresponding indicators, i.e. the employed and unemployed labour force, are used around the world to describe cyclical developments on the labour market. Monthly figures are essential in this respect. In addition, UWV issues its own monthly figures on unemployment benefits. Figures released by UWV are not directly comparable with the CBS labour force indicators.