The Netherlands 10 years after Lehman Brothers

© Hollandse Hoogte
A little over ten years ago, on 15 September 2008, US investment bank Lehman Brothers filed for bankruptcy. The collapse is often seen as the start of the global credit crisis, which turned into a global economic recession shortly afterwards. In our country, as in many other countries, the economy contracted very severely in 2009. After a brief recovery period, another downturn occurred in 2012 and 2013: the so-called ‘double-dip recession’. Nowadays, the entire period of economic downturn after the collapse of Lehman Brothers is simply referred to as ‘the crisis’.

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How have the Dutch economy and society developed over the decade following this collapse? It is impossible to give a comprehensive answer to this question, but we can provide an overview, using various socioeconomic and demographic indicators. Predominantly annual figures have been used in order to describe major developments as accurately as possible. The figures cover the period up to and including 2017. Data for the first six months of 2018 do not reveal a fundamentally different picture. The starting year for this overview is 2007, as this makes the changes in 2008 more readily visible.

The following picture emerges from these indicators. The Netherlands has seen an economic upturn for some time now, as clearly reflected in the figures. Both GDP and GDP per capita are well above pre-crisis levels. Consumer confidence is significantly higher than the average in 2007, just before the outbreak of the crisis. Home sales and house prices have also risen above their pre-crisis levels.

Recovery still incomplete

Recovery is nevertheless still fragile in a number of areas. For example, the level of government debt is still substantially higher than before the crisis, while housing production is still much lower. The labour market needs more time to bounce back to its pre-crisis level as well. For example, unemployment is still somewhat higher than pre-crisis; net labour participation is somewhat lower, while employment in manufacturing, construction and financial services is even far below that level. Labour market tension has remained below the pre-crisis level as well. In addition, the number of people on minimum income support is now significantly higher than before the crisis.

To find out how the economy is doing, we also look at the fertility rate and the number of civil unions: the so-called ‘soft’ economic indicators. During economically hard times, people tend to postpone formalising a union or starting a family. In 2017, the number of people in civil unions including marriages and registered partnerships was slightly lower than at the onset of the crisis. Despite a rising trend as of 2014, the number of civil unions has been too low to compensate for the strong decline during the crisis years. The number of births, too, was lower in 2017 than ten years previously. In this period, having children was notably postponed more and more often, by people in their twenties in particular.

It is not easy to determine the extent to which all these developments are linked to the economic crisis. An economic crisis never stands on its own. There are always other - often autonomous - processes which occur simultaneously and also steer the direction of developments. Throughout the past decade, these have included such trends as population ageing, globalisation, automation and a rising female employment rate. The objective of this article is to draw broad comparisons between now and ten years ago, irrespective of the question whether the crisis actually triggered these divergent developments.

GDP per capita

The Dutch economy contracted in 2009 and in the period 2012-2013. This period was marked by slow population growth. Both in 2009 and in 2013, GDP per capita was over 4 percent below the level in 2008. This measure of income growth was back to its 2008 level only in 2016. In 2017, GDP per capita was well over 2 percent higher.

GDP per capita
 GDP per capita (2008=100)GDP (2008=100)Population (2008=100)
*provisional figures

Consumer confidence

Already in 2007 - before the onset of the crisis - consumer confidence declined. Many media reports focused on the breakdown of the international financial markets caused by insufficient liquidity in the US mortgage market as well as volatility in the stock markets. Public confidence was restored in a structured manner after 2012, eventually rising far above the pre-crisis level. From end-2016 onwards, public confidence was well beyond the level end of 2007. In 2017, consumer confidence was at the highest level ever recorded, namely 24 points on average. A similar level was reached before, but in 2000.

Consumer confidence
   Consumer confidence (seasonally adjusted) (Balance of positive and negative answers)Consumer confidence (annual average) (Balance of positive and negative answers)

Government debt

At the start of the crisis, government debt increased rapidly to 68 percent of the GDP in 2014. The accumulation of debt was mainly on account of state aid granted to financial institutions, falling tax revenues due to the economic downturn, and rising expenditure as a result of mounting unemployment. Recovery did follow after 2014. In 2017, government debt was in compliance with the European ceiling again (60 percent of GDP) for the first time since 2010. At the end of 2017, the Netherlands’ government debt stood at 57.1 percent.

Government debt
 Government debt (% of GDP)

In 2017, the general government balance - i.e. the difference between public revenue and expenditure - was exceptionally high at 9 billion euros. This is equivalent to 1.2 percent of GDP, and a much higher surplus than just before the crisis. The Netherlands has complied with the 3-percent deficit criterion of the European Union since 2013.

Government balance
 Government balance (% of GDP)
*provisional figure

New build homes

As the crisis progressed, the construction of new build homes dropped to a low. In 2010 in particular, the number of new-build homes that were added to the dwelling stock declined significantly: by more than 30 percent year-on-year. Hitting a low in 2014 with only 45 thousand newly constructed homes, the sector then slowly recovered. Nearly 63 thousand new-build homes were reported as completed in 2017. This is the highest number on record since 2009, but still one-quarter lower in output than in 2007.
Between the beginning of 2007 and 2017, the dwelling stock grew by 8.7 percent. This is slightly above the growth in the number households. The percentage share of single and single-parent households has increased strongly over the past decade.

New build dwellings
JaarNew build dwellings (x 1,000)

Home sales

Shortly after the outbreak of the crisis, home sales were in rapid decline. Sales reached their lowest level in 2013 with slightly more than 110 thousand homes sold. The number of transactions went up after that, and nearly 242 thousand existing homes went to new owners in 2017. This is the highest number since 1995. A catch-up effect is seen here, following a period with homes not getting sold or only getting sold at a loss.

Residential home sales
 Residential home sales (x 1 000)
Bron: CBS, Kadaster

House prices

Prices of existing owner-occupied homes dropped after the outbreak of the crisis. As the number of housing transactions increased after 2013, so did house prices. In 2017, house prices were - on average – 8 percent up on the previous year and more than 3 percent up on 2008. There were strong regional differences, however. In the four main Dutch cities (Amsterdam, Rotterdam, The Hague and Utrecht), house prices were well above the 2008 price levels, but this was not the case in large parts of the country outside of the Randstad conurbation.

House price index for existing own homes
 House price index for existing own homes (2008=100)
Source: CBS, Kadaster

Total mortgage debt of households

The housing market has been in constant movement after hitting a low in 2013. In 2017, the number of houses sold was double that of 2013, while house prices increased by 23 percent over this period. In this respect, the 3.3 percent rise in total mortgage debt - by 22 billion euros - was relatively moderate. Notwithstanding the absolute increase in debt liabilities over the past few years, total mortgage debt has declined as a percentage of GDP. In 2012, the gross debt ratio was still at 105 percent, but this had dropped to 94.3 percent in 2017. This was below the level of 2007 (95.8 percent).

Mortgage debt and GDP
 GDP (x bn euros)Mortgage debt (x bn euros)Mortgage debt relative to GDP (x bn euros)

The worsening housing market initially acted as a brake on the number of mortgage transactions. Conversely, the recovering housing market in recent years has given fresh impetus to these transactions. Regulatory measures by the government and by mortgage lenders, such as the abolition of interest-only mortgages and reduction of the maximum mortgage amount, have helped abate the rise in mortgage debt. Mortgages constitute over 85 percent of total household debt. On the other hand, an (unknown) amount of savings is being accumulated specifically to repay mortgages.

Net labour participation

At the end of 2017, the number of people in paid employment was higher than ever. Nevertheless, net labour participation (on average 66.7 percent) was still somewhat lower than before the outbreak of the crisis (nearly 68 percent). The all-time low was 64.9 percent in 2014. The net labour participation rate is the percentage of 15 to 74-year-olds who are in paid employment. For every 100 people in this group, there was at least one employed person less in 2017 compared to 2008.

Net labour participation
 Net labour participation (%)

Factors in the development of labour participation include population growth and changes in the age composition of the population. The labour force includes all persons aged 15 to 74 years. Between 2007 and 2017, the number of people in the age category 25 to 45 years decreased while other age categories increased. These developments contributed to the falling labour participation rate, since it is the category 25 to 44-year-olds who constitute the highest share in labour participation: 84 percent in 2017. Labour participation among 45 to 64-year-olds has increased substantially over the past decade, up to 75 percent in 2017.

Population composition, 15 to 74 years
 15 to 24 years (million)25 to 44 years (million)45 to 64 years (million)65 to 74 years (million)

Employment by sector

Jobs were lost in most sectors during the crisis, but there have been signs of broad-based recovery in the meantime. Heavily affected were the sectors construction, manufacturing and financial services. Meanwhile, employment in construction and manufacturing has picked up again; in the financial services sector it is shrinking further. Demand for personnel in this sector has been reduced not only on account of the crisis, but also due to the automation of tasks.
The labour volume in these three sectors was lower in 2017 than ten years previously; in all sectors combined, the labour volume had already exceeded the 2007 level. The construction sector is different from the other two sectors in that it has a relatively high share of self-employed.


Unemployment in the Netherlands started to increase gradually after 2008. The unemployment rate was stable in 2011, subsequently rising to 660 thousand in 2014. The rate fell sharply after this, but in 2017 it was still well above the 2008 level with 438 thousand unemployed persons. Unemployment was highest in the category 55 to 64-years. This is apart from the 15 to 24-year-olds, who mainly include students. Relative to 2008, the number of unemployed doubled in this age category. Furthermore, the number of employed persons aged 55 to 64 years rose by approximately one-third over this period.

Unemployed labour force
jaar15 to 24 yrs (x 1 000)25 to 34 yrs (x 1 000)35 to 44 yrs (x 1 000)45 to 54 yrs (x 1 000)55 to 64 yrs (x 1 000)65 to 74 yrs (x 1 000)Total (x 1 000)


Ageing means the percentage of elderly people in the population increases. Elderly people participate less in economic activity than young people. The increase in the share of over-65s accelerated in 2011, due to the post-war baby-boomers who began reaching the age of 65 in that year. The old-age-dependency ratio - i.e. the number of people aged 65 and over in proportion to the number of 20 to 64-year-olds - was up by one-third in 2017 relative to 2007.

Old-age-dependency ratio
Jaaraged 20 to 64 yrs (mln)aged 65 and over (mln)Old-age-dependency ratio (mln)

Social assistance

At the end of 2008, 304 thousand people under the state pension (AOW) entitlement age were dependent on a social assistance benefit. The number rose to 465 thousand towards the end of 2016. A slight decline followed in 2017 to 457 thousand. This is still more than 1.5 times the number in 2008. An explanation for this rise until 2016 - despite the economic recovery during that period - is that labour market developments have a delayed effect on the number of people receiving social assistance. Another reason for the delayed tipping point is the arrival of a large number of refugees as of 2013. Asylum seekers who are given refugee status may claim income support (social assistance benefit).

People receiving social assistance until state pension retirement age1
 People on minimum income support (x 1 000)
1 Measured in December of the same year

Tension on the labour market

Tension on the labour market reached a peak in mid-2008, with 1.3 unemployed against each unfilled job vacancy. Subsequently, the financial crisis caused the number of job vacancies to plummet while unemployment went up. At the end of 2013, there were over seven times more unemployed than unfilled job vacancies. Labour market tension has risen gradually since then. By the end of 2017, the situation in the labour market tightened again for the first time since the boom years 2007 and 2008. However, the labour market as of mid-2018 is not as tight as in 2008, with 1.4 unemployed for each job vacancy.

Marriages and partnership registrations

Fewer people formalised their relationship during the crisis years, e.g. in a marriage or registered partnership. The number has grown slightly as of 2014. A potential explanation is that people tend to go for formal registration of their relationship during economic good times, rather than when pessimism prevails.
The number of people entering matrimony declined between 2007 (4.6 per thousand inhabitants) and 2017 (3.8 per thousand inhabitants). The latter number has been virtually stable since 2013. The average age at which people get married is also increasing. The rise of registered partnership is compensating for the fall in the number of marriage registrations after the crisis years. In 2008, there were 0.66 partnership registrations per thousand inhabitants. It was more than 1.5 times higher by 2017 (1.04 per thousand inhabitants). The increase has been more evident since 2015.

Marriages and partnership registrations
 Marriages (per 1 000 inhabitants)Partnership registrations (per 1 000 inhabitants)Total (per 1 000 inhabitants)


There were fewer than 170 thousand live births in 2017. Ten years previously, the number of births was higher by around 11 thousand. Fertility is one of the soft economic indicators that are used to measure the economy. In times of economic downturn, there is a general tendency to postpone parenthood. Fertility follows the economic cycle, albeit with some delay. However, the upward trend that is seen in the economy as of 2013 has not been repeated in the fertility rates. One explanation may be the shift in the timing of parenthood that has been observed over the past ten years. Especially people in their twenties are postponing parenthood, while people in their thirties are showing fewer signs of catching up.

Fertility rate (average number of births per woman)
 Average number of children per womanChildren born