No further decline in unemployment in January

UWV: customary increase in WW benefits in January

At the end of January 2023, UWV provided 154 thousand current unemployment benefits. This is over 5 thousand more than in the previous month (+3.5 percent). An increase at the beginning of the year is customary. In the winter months, there is often less work in construction and agriculture and many contracts expire at the end of the calendar year. The number of WW benefits is still very low. In January, it was down by 20 percent year on year. Twenty-three thousand new WW benefits were granted and 18 thousand benefits were terminated.

Decline in inactive labour force

In January, 3.6 million people aged 15 to 74 years did not have paid work for a variety of reasons. Aside from the unemployed, 3.2 million people were not looking and/or immediately available for work; they are not counted towards the labour force. These are mainly retirees and people unable to work due to illness or disability.

This inactive labour force has dropped by an average of 21 thousand per month over the past three months. This means that the inactive labour force has shrunk significantly for the second year in a row: in January 2021, it still included 3.5 million people. On the other hand, the labour force, i.e. employed plus unemployed people aged 15 to 74 years, grew strongly and includes more than 10 million people since the end of last year. Two years ago, this number still stood at 9.6 million.

Inflow of unemployed from inactive labour force slightly higher

There were 5 thousand fewer unemployed in January than three months previously (a decrease of 2 thousand per month on average). This decline is the result of underlying flows between the active, unemployed and inactive labour force. This is visualised in the diagram below.

The diagram shows that unemployment may decrease not only because more unemployed find a job than employed people lose jobs, but also because more unemployed stop seeking work than people start seeking work.

In recent months, unemployment has declined because the number of people with jobs who became unemployed was lower than the number of unemployed who found a job. In January, this balance stood at 44 thousand, slightly lower compared to the previous month.

In January, the inflow of unemployed from the inactive labour force amounted to 38 thousand, on balance. This is somewhat higher than in the final months of 2022, but still not as high as in the summer months of last year, when the number of unemployed increased. This is because the inflow of jobseekers from the inactive labour force over the past few months was lower than during those summer months and the number of people who stopped seeking work was still slightly higher than it was then.

Every month, CBS publishes figures on the labour force in accordance with guidelines of the International Labour Organization (ILO). 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.