More unemployment in July among 25 to 44-year-olds

There were 4.1 million people who did not have paid work for a variety of reasons. In addition to the unemployed mentioned earlier, 3.8 million people had not looked or/nor been immediately available for work recently. These people are not counted towards the labour force. Their number dropped by 5 thousand per month on average over the previous three months.

Unemployment indicator

In order to enable comparison of cyclical movements 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 313 thousand unemployed in July, equivalent to 3.4 percent of the labour force. This is the same percentage as in June.

UWV: WW benefits down by 45 thousand year-on-year

At the end of July, UWV provided 234 thousand unemployment benefits. This represents a year-on-year decline of 45 thousand. The number of WW benefits was down by almost 9 thousand relative to the previous month. The decline has continued because the number of benefits terminated in the period January-July (225 thousand) exceeded the number of benefits granted (196 thousand).

UWV: WW inflow barely declining any further

With 196 thousand new benefits, unemployment inflow in the first seven months of 2019 was 1 percent lower than in the same period in 2018 (198 thousand). When comparing the first seven months of 2018 and 2017, this was still a decline of 18 percent.

More job losses

The unemployment rate among 25 to 44-year-olds has not dropped any further since August 2018, and rose from 2.6 to 2.8 between May and July this year. Among the over-45s, on the other hand, the share of unemployed in the labour force fell from 3.7 to 2.7 in the span of twelve months. Youth unemployment (6.7 percent) was also down in July year-on-year (7.3 percent), although it has risen slightly in recent months.

The unemployment rate represents a balance of various flows on the labour market. Unemployment inflow may be caused by people in employment losing their job and people not in employment who are not active on the labour market and start looking for a job. The employment rise among 25 to 44-year-olds is mainly related to the increased flow of employed people in this age category who lose their job. In Q2 2019, there were 27 thousand unemployed who were still in employment in the previous quarter. Previously, this number of job losses fell from 62 thousand in Q2 2013 to 24 thousand in Q2 2018. Among 25 to 44-year-olds, those who have been employed by a company (or have been self-employed) for less than one year become unemployed in particular, namely 57 percent. This was still 43 percent in Q2 2018. The reverse flow, i.e. unemployed 25 to 44-year-olds finding a job, remained virtually the same in number compared to Q2 2018.

Unused labour potential

Every month, CBS publishes figures on the size of the employed labour force and the non-employed population. The latter group comprises the unemployed labour force as well as people not included in the labour force (all these groups follow the ILO definition).

However, the unemployed labour force does not represent all unused labour potential. According to the ILO indicator, this includes other groups of people aside from the unemployed. 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 only 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 (Q2 2019). The total unused labour potential in Q2 2019 comprised 1.0 million people. This was still 1.1 million one year previously. Development of the total unused labour potential closely follows developments in unemployment.

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.