Germany's labour market in better shape compared to its western neighbours

06/11/2015 15:00

Compared to the Netherlands and Belgium, Germany’s labour market has been in much better shape over the past decade. Among the three countries, only Germany has seen a fairly steady decline in unemployment since 2005. In September 2015, Germany’s unemployment rate was 4.5 percent versus 6.8 percent in the Netherlands and 8.7 percent in Belgium, as reported by Statistics Netherlands today.

Unemployment figures as of 2005 have developed very differently among the Netherlands, Germany and Belgium. Initially, unemployment was lowest in the Netherlands but then started going up at the beginning of the economic crisis. Belgium’s unemployment rate is now more or less at the same level after ten years of fluctuations. Back in 2005, Germany’s performance was worst, but is now the best among the three countries.

Germany: almost continuous decline

In 2005, Germany’s unemployment rate was by far the highest among the three countries at 11.2 percent while the Netherlands had the lowest rate with 4.3 percent. Since then, Germany has seen an almost continuous decline with only a small interruption in 2008, the first year of the crisis.

In the Netherlands and Belgium, 2008 marked a turning point from declining to rising unemployment figures. The Dutch unemployment rate only started going down early this year.
Belgium’s unemployment rate has kept hovering around 8 percent. By September 2015, the rate was barely higher than in 2005. However, while Belgium ranked average in 2005, this year it is showing the highest percentage among the three countries.

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Regional variation in 2014

As for unemployment rates in the border areas, there is a difference between Germany and the Netherlands versus Belgium and the Netherlands. The Netherlands had a higher rate compared to its Germany to the east, with the exception of Düsseldorf district, where percentages were at the same level.

Unemployment rates on either side of the Dutch border with Flanders (Belgium) were at a similar level in 2014. In Belgium, the division between regions with higher and lower rates is along the line of the  linguistic border. There is considerably higher unemployment in French-speaking Wallonia.

Dutch Limburg, which borders Wallonia in the south, is therefore the province with the largest differences across its borders. This province not only has neighbouring regions with similar unemployment rates, but also has regions with lower and with significantly higher rates.

Germany showed considerable differences among its regions in 2014. The south had the lowest unemployment rate while the east – the former GDR – had the highest. Berlin was an exception with unemployment almost reaching 10 percent. Western Germany, close to the border with the Netherlands, and the south of the Federal Republic had unemployment rates almost everywhere lower than the Dutch figure.

The Netherlands has much smaller regional differences than its neighbours. Unemployment is divided more equally over the country.

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The Netherlands has lowest long-term unemployment rate

Long-term unemployment remained lower in the Netherlands (39 percent in 2014) than in both neighbouring countries. In Belgium on average half of all unemployed people was out of work for longer than a year. Belgian unemployment is also different from the Dutch and German labour markets due to its lower gross labour market participation rate. This means fewer people are available for the labour market because they are unable or unwilling to work.

In 2014, the share of long-term unemploymed in total unemployment was 44 percent in Germany, but exceeded 60 percent in some regions of Germany and Belgium.

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