Unemployment rising less rapidly in August

Higher employment and unemployment in August

Over the previous three months, the size of the Dutch labour force (the active and unemployed labour force combined) increased by 49 thousand people monthly on average. This increase followed a sharp decline in the size of the labour force in April, after the outbreak of the coronavirus crisis. The increase was partly on account of a less substantial rise in unemployment compared to the number of employed in that period.
As a result of the rise in both employment and unemployment in June, July and August, in the latter month the labour market was back at the same level as in Q1 2020.

Unemployment grew more slowly than in previous months

In order to enable comparison of cyclical movements 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 426 thousand unemployed in August, equivalent to 4.6 percent of the labour force. This was 4.5 percent in July. Unemployment was still rising between May and June, from 3.6 to 4.3 percent.

UWV: Decline in unemployment benefits

At the end of August, UWV provided 292 thousand unemployment (WW) benefits. This represents a decline of 9.1 thousand on July, when it amounted to 301 thousand. The decline was mainly visible among young people aged 15 to 25 years (-14.9 percent). Nevertheless, the number of WW benefits is still substantially higher than at the beginning of 2020.

UWV: Fewer new benefits

In August, 7.1 thousand new WW benefits were granted each week on average. This represents a decline on July, when the average number of new WW benefits stood at 8.7 thousand. Due to the coronavirus crisis, the inflow was structurally higher between March and July of this year compared to the same period last year. By August, the number of new WW benefits was almost equal to August 2019. 

More people seeking work again

The rise in both employment and unemployment is the result of underlying flows between the active, unemployed and inactive labour force. This is visualised in the diagram below.

* Figures are provisional

Over the previous three months, unemployment rose by nearly 100 thousand. On the one hand, more people started seeking employment (from inactive labour force to unemployed) than stopped seeking (from unemployed to inactive labour force). On balance, this resulted in unemployment rising by 88 thousand over the past three months. Furthermore, more people lost their job and became unemployed (from active to unemployed) than there were unemployed people who found a job (from unemployed to active). On balance, this resulted in unemployment rising by 7 thousand persons.

Between May and August, the main reason behind the higher unemployment was that more people started seeking work rather than many people losing their job, as was the case between March and June. The number of people in work increased as well between May and August, namely by 53 thousand. This was mainly due to a larger number of people entering the labour market who found work immediately (from inactive to active labour force) against a smaller number of people who stopped working and left the labour market (from active to inactive labour force).

Between March and June, on the other hand, a relatively high proportion of the active labour force left the labour market (temporarily) and became part of the inactive labour force.

Every month, CBS publishes figures on the labour force in accordance with international guidelines. The corresponding indicators, i.e. the active 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. Over the past three months, the number of unemployed rose more sharply than the number of unemployment benefits.