Over 9 million in work for the first time

Around 4.0 million people did not have paid work in December 2019 for a variety of reasons. In addition to the unemployed mentioned earlier, this included 3.7 million people who had not looked or/nor were immediately available recently. They are not counted towards the labour force. Their number dropped by an average of 1 thousand per month over the previous three months.

Unemployment indicator

In order to enable a comparison of cyclical movements in the labour market between different countries, the unemployment indicator of the International Labour Organisation (ILO) is often taken as a measure. According to this indicator, the ‘unemployed’ include 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.

In December, unemployment stood at 302 thousand. This brought the total number of unemployed at the end of the year to approximately the same level as at the beginning of Q2 2019, despite a slight increase over Q2 and Q3. The unemployment rate was back to the same level as well; in December it stood at 3.2 percent against 3.3 percent in April and May. In the intervening months, unemployment did increase to 3.5 percent.

The lower unemployment rate in December as compared to April/May – despite the virtually unchanged number of unemployed – can be explained the growing size of the labour force.

UWV: Continued decline in unemployment benefits

At the end of December 2019, the Employee Insurance Agency (UWV) recorded 223 thousand current unemployment (WW) benefits. The number dropped by 1.9 percent on the previous month (228 thousand). By the end of 2018, the number of unemployment benefits still stood at 263 thousand. This represents a year-on-year decline of 15 percent. The number of WW benefits fell across all occupational groups. The largest decrease was seen in agricultural occupations (-21 percent), care and welfare occupations (-19.1 percent) and pedagogical occupations (-18.2 percent).

UWV: Sharp decline in number of benefits among over-50s

Relative to one year previously, the number of WW benefits among people aged 50 and over declined by over 20 percent. In December 2019, close to 46 percent of all WW benefits issued by UWV were received by people in this age group. This share was 49 percent one year previously. The main contributing factors were improved labour market conditions (with more jobseekers able to land a job) and the stepwise reduction in the duration of WW benefits to a maximum of 24 months.

Employment rose, unemployment declined

Since Q1 2014, the number of employed has risen almost continuously. This coincided with a long period of decline in unemployment, but this was interrupted by a slight increase in unemployment in Q2 and Q3. The main contributing factor were people seeking work who had previously not been active on the labour market. Those who were not immediately able to find work were thus included in the unemployment figures. This trend changed at the end of 2019: More people who entered the labour market were able to start immediately and fewer people became unemployed.

Unused labour potential

Every month, CBS publishes figures on the total employed and non-employed population. The latter group comprises the unemployed workforce and those not included in the workforce (all according to the ILO definition).

However, the unemployed labour force does not cover total unused labour potential; other groups are included as well, aside from the unemployed according to the ILO indicator. These are people who 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.

CBS reports on these groups quarterly in terms of their size and composition. The overall picture represented here (see figure below) is based on the latest quarterly figures (Q3 2019). The total unused labour potential in Q3 2019 comprised nearly 1.0 million people, i.e. 120 thousand fewer than one year previously. The development of the total unused labour potential is closely related to the development of unemployment.