Unemployment rate stayed at 3.6% in February

In February, 4.1 million people aged 15 to 74 years did not have paid work for a variety of reasons. In addition to the unemployed, 3.8 million people were not looking and/or immediately available for work recently. These people are not counted towards the labour force. Their number decreased by an average of 3 thousand per month over the past three months.

Unemployment rate unchanged in February

In order to enable comparison of cyclical movements in the labour market between countries, the unemployment indicator of the International Labour Organization (ILO) is often taken as a measure. According to this indicator, the ‘unemployed’ includes all persons who do not have paid work but who have been looking recently and who are immediately available. This covers the population aged 15 to 74 years. There were 340 thousand unemployed in February, equivalent to 3.6 percent of the labour force. This is the same percentage as in January. Between March and August, the unemployment rate rose from 2.9 to 4.6 percent. It then declined on a monthly basis up to January inclusive.

UWV: slightly fewer unemployment benefits in February

At the end of February 2021, UWV provided 286 thousand current unemployment (WW) benefits, 2.5 thousand fewer than in the previous month (-0.9 percent). In February, 31.8 thousand new WW benefits were granted while 34.2 thousand benefits were terminated.

UWV: fewer long-term benefits since February 2020

In the span of one year, the number of current WW benefits increased by 45.9 thousand. Most people are on unemployment benefit for less than 6 months. In February 2021, this applied to 177 thousand benefits, against 145 thousand one year previously. This represents an increase of 21.8 percent. On the other hand, the number of WW benefits issued for twelve months or more has fallen (-7.9 percent): from 50 thousand benefits in February 2020 to 46 thousand in 2021.

The year-on-year increase since February 2020 also varies by age group; in the category up to 27 years, the number of current WW benefits is 67.3 percent up on twelve months previously; in the age group 27 to 49 years, the increase is 20.9 percent and in the group aged 50 years and over it is 9.0 percent.

Increase in labour participation

In February, the number of employed stood at 9.0 million, similar to the beginning of last year. These are people in paid employment or self-employment, regardless of the number of hours worked. Just before the outbreak of the coronavirus crisis, in March 2020, the active labour force had increased by nearly 900 thousand in six years. Between March and May, the number of people in work fell by 184 thousand and the labour participation rate dropped relatively sharply. Subsequently, it picked up again; in the age category 25-44 years, more people are working again compared to the previous year. Among the over-45s, labour participation is at the same level as last year. The largest decline was recorded among the young labour force; labour participation has not yet returned to the level of early 2020.

On average, unemployment declined over the past three months

The decline in the number of unemployed over the past three months is the result of underlying flows between the active, unemployed and inactive labour force. This is visualised in the diagram below.

In February, 340 thousand people were unemployed. This number stood at 378 thousand three months previously, in November. This means that unemployment declined by 38 thousand over this period (13 thousand per month on average). On the one hand, this was because there were more unemployed who found work (from unemployed to employed) than employed who lost their job and became unemployed (from employed to unemployed). On balance, this resulted in unemployment declining by 28 thousand over the past three months.
On the other hand, unemployment also declined because there were fewer people who started looking with no direct result (from inactive labour force to unemployed) than people who stopped looking and/or were not available (from unemployed to inactive labour force). On balance, this resulted in 9 thousand fewer unemployed persons. This balance has now been negative for four months in a row. The last time such a series occurred was in 2014.

More people in work

The active labour force grew by 49 thousand over the past three months. This was not only because the number of unemployed entering the labour market exceeded the number of people in work becoming unemployed (+28 thousand). There were also 194 thousand people who entered the labour market and found work immediately (from inactive to active labour force), while a smaller number of people (172 thousand) stopped working and left the labour market (from active to inactive labour force). As a result, the active labour force grew by another 22 thousand.

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.