Unemployment falls below 4 percent

19/04/2018 15:00
Over the previous three months, the number of people aged 15 to 74 in paid employment grew by an average of 20 thousand per month, Statistics Netherlands (CBS) reports. There were over 8.7 million people in work in March. Around 4.2 million people did not have paid work for a variety of reasons, including 357 thousand people who indicated they had recently looked and been immediately available for work. According to the ILO definition, these are the unemployed. Their number declined by 13 thousand per month on average over the previous three months. As a result, the unemployment rate in the Dutch labour force stood at 3.9 in March.

The remainder of the group not in employment (nearly 3.9 million) had not looked or/nor been immediately available for work recently. Their number dropped by an average 3 thousand per month over the previous three months. The Employee Insurance Agency (UWV) recorded a decline in the number of unemployment (WW) benefits to a total of 327 thousand at the end of March; down by over 2 thousand compared to the previous month.

Infographic, Changes in labour force composition march 2018

357 thousand unemployed according to ILO definition

In order to enable comparison of cyclical developments 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 357 thousand unemployed in March, equivalent to 3.9 percent of the labour force. The unemployment rate stood at 4.1 one month previously.

UWV: Gradual decline, high dynamics

The number of WW benefits in March fell by 0.7 percent to a total of 327 thousand. This is equivalent to 314 thousand benefit recipients. There is high degree of dynamics in terms of people entering and leaving unemployment (WW), partly as a result of seasonal influences. In the first three months of 2018, UWV provided 100 thousand new unemployment benefits; 103 thousand benefits were terminated. Over half of the terminated unemployment benefits lasted for less than six months.

UWV: Nearly 100 thousand long-term WW benefit recipients

The number of people receiving an unemployment benefit for one year or longer dropped below 100 thousand. In the past four years, this has only occurred once before. More than three-quarters of these benefit recipients are 50 years of age or older.

Unemployment gap between men and women has narrowed

The unemployment rate was not yet at pre-crisis level in the past month. However, it has been reduced by half since the beginning of 2014 when employment peaked at 7.8 percent.

In March 2018, 3.8 percent of the male and 4.1 percent of the female labour force were unemployed. The gap between men and women was therefore far narrower than ten years ago, when the labour market was tight as well. At that time, 3.0 percent of the male and 4.4 percent of the female labour force were unemployed. The unemployment rate among women is already below pre-crisis level; this is not yet the case for men.

Unused labour potential

Every month, CBS publishes figures on the total (employed and unemployed) labour force as well as the number of people not in the labour force (ILO definition). However, the unemployed labour force does not include the total unused labour potential, i.e. other groups of people aside from the unemployed according to the ILO indicator. These people have either looked for work recently or are immediately available for work. They are counted towards the unused labour potential, but fall outside the scope of the ILO definition of employment. People who work part-time but want to work more hours and are immediately available are also included in the unused labour potential.

These groups are reported on every quarter in terms of size and composition. The overall picture provided in the table below is based on the latest quarterly figures (Q4 2017). The total unused labour potential stood at over 1.2 million in Q4 2017, versus nearly 1.4 million one year previously. Development of the total unused labour potential closely follows developments in unemployment according to the ILO definition. Figures for Q1 2018 will be published on 15 February 2018.

Infographic, Labour force barometer Q4 2017

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.

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