Over 200 thousand fewer employed since March 2020

At the end of May, the Employee Insurance Agency (UWV) recorded 301 thousand current unemployment (WW) benefits, an increase of 9 thousand on the previous month.

Unemployment is determined on the basis of samples. In order to minimise fluctuations as a result of the sample nature, CBS generally uses the average trend over the previous three months. Because the recent measures to combat the spread of coronavirus have a major impact on the labour market, the developments in the past months are described here separately. Contrary to common practice, the figures are provisional and may be adjusted in the coming months.

Increase in unemployment less substantial compared to April

In May 2020, there were 330 thousand unemployed in the Netherlands, i.e. 16 thousand more than in April and 56 thousand more than in February. The majority (38 thousand) were under the age of 25. As a result, May’s unemployment rate stood at 3.6 percent, the same level as at the beginning of 2019. The rate was still 2.9 percent in March. In April, it was 3.4 percent.

Higher number of unemployed not equal to lower number of employed

The decline in the number of employed does not automatically lead to an equally large increase in the number of unemployed. Unemployment is determined on the basis of the ILO (International Labour Organization) definition. Only those who are not in paid work but are looking and immediately available for work fall under this definition. Others without a job are not counted towards the labour force. The inactive labour force has risen by 158 thousand since March.

CBS also uses the concept of unused labour potential in order to identify non-unemployed people without work who could re-enter the labour market in the near future. The unemployed fall under this category, as well as part-time workers who want to work more hours. Both groups belong to the labour force. In addition, a part of the inactive labour force is counted towards the unused labour potential. It includes people without paid employment who are available but have not looked for work, and those who have looked but are not available. These groups are only reported on every quarter in terms of size and composition.

The figures over the previous three months do show that the unused labour potential is growing again, after years of decline. The increase is strongest among those who are available for work but have not looked recently.

UWV: Increase in WW benefits smaller than in April

As of the end of February, the number of current WW benefits increased by nearly 61 thousand to 301 thousand at the end of May. In March, the number of WW benefits rose by over 10 thousand, while in April the number was up by nearly 42 thousand. In May, the increase stood at 9 thousand (+3.1 percent). This means that the number of WW benefits continues to rise, although the increase in May was smaller than in April.

UWV: 42 thousand new WW benefits in May

In May, UWV recorded 42 thousand new WW benefits. This is less than in April, when there were nearly 74 thousand new benefits. In March, UWV provided 37.8 thousand new benefits. April had one reporting week more than March and May, but the average weekly inflow in May was also lower than in April. In May, there were 10.5 thousand new WW benefit recipients per week, while this number was 14.7 thousand in April and 9.4 thousand in March.

Mainly fewer young people in work

After February, the number of people in paid employment fell by 201 thousand. The decline was strongest among young people in particular: from 1.4 million in February to under 1.3 million in May (down by 139 thousand). In February, the number of 25 to 44-year-olds and 45 to 74-year-olds in paid employment stood at 3.6 and 4.0 million respectively. The decline in employment in these age groups was relatively small: 18 and 45 thousand respectively.

Decline in employment due to more job losses and fewer job gains

The lower number of employed and the higher number of unemployed are the result of underlying flows between the active, unemployed and inactive labour force. The below chart shows the changes between the three labour positions. Not only were there more people who lost their jobs in April and May, but there were also fewer people who started a new job.

The number of people who started working was mainly down among those who previously did not belong to the labour force. This number dropped from 220 thousand in February to 126 thousand in May. For example, these are young people who started a (part-time) job while not being unemployed previously, i.e. they were not looking for work three months previously. The number of job gains among people who were unemployed three months previously went down as well, from 102 thousand in February to 54 thousand in May.

Aside from the lower number of job gains, there was an almost equal higher number of job losses. The number of people losing their jobs and leaving the labour market increased from 203 thousand in February to 263 thousand in May. This means that they were not looking and/or available for work, after they had gone out of employment. In addition, 56 thousand people became unemployed in February who were still working three months previously. This number increased as well and stood at 118 thousand in May.

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 do not correspond one-to-one with the labour force indicators.