Unemployment rate down to 3.6 percent

© Hollandse Hoogte / Novum RegioFoto
In January, there were 337 thousand unemployed, equivalent to 3.6 percent of the labour force. From November through January, unemployment declined by an average of 23 thousand per month. This is the strongest decline since the start of monthly records in 2003. The number of employed grew by 19 thousand per month on average over the past three months, ending at 9.0 million in January. Unemployment also declined because fewer young people entered the labour market. However, the number of unemployed is still 64 thousand higher than at the start of the coronavirus crisis. Statistics Netherlands (CBS) reports this on the basis of new labour force figures. At the end of January, the Employee Insurance Agency (UWV) recorded 289 thousand current unemployment (WW) benefits.

In January, 4.1 million people aged 15 to 74 years did not have paid work for a variety of reasons. In addition to the unemployed, 3.8 million people were not looking and/or immediately available for work recently. These people are not counted towards the labour force. Their number rose by an average of 7 thousand per month over the past three months.

Unemployment further down in January

In order to enable comparison of cyclical movements in the labour market of different countries, the unemployment indicator of the International Labour Organization (ILO) is often taken as a measure. According to this indicator, the ‘unemployed’ includes all persons who do not have paid work but who have been looking for paid work recently and who are immediately available. This concerns the population aged 15 to 74 years. There were 337 thousand unemployed in January, equivalent to 3.6 percent of the labour force. This percentage is still higher than in March 2020 (2.9 percent), when the coronavirus crisis started. Between March and August, the number of unemployed rose by more than 150 thousand and the unemployment rate from 2.9 to 4.6 percent. Since then, unemployment has been falling again on a monthly basis.

Unemployment and unemployment benefits
   Unemployment indicator (ILO)
(15 to 74 yrs, seasonally adjusted) (x 1,000)
WW benefits (15 yrs to pension entitlement age) (x 1,000)
2012January486292
2012February482299
2012March487296
2012April502292
2012May501291
2012June502291
2012July518298
2012August517304
2012September530304
2012October539310
2012November554322
2012December572340
2013January589369
2013February601377
2013March619380
2013April625380
2013May632378
2013June648382
2013July666395
2013August670399
2013September675400
2013October680408
2013November677419
2013December687438
2014January691460
2014February699460
2014March692454
2014April684443
2014May672436
2014June656431
2014July648437
2014August637430
2014September630420
2014October632419
2014November635425
2014December643441
2015January645458
2015February633455
2015March626443
2015April625427
2015May617416
2015June611410
2015July603420
2015August604420
2015September609417
2015October616421
2015November596427
2015December588446
2016January574465
2016February581469
2016March574470
2016April572461
2016May560448
2016June550438
2016July541432
2016August521427
2016September510424
2016October502420
2016November499410
2016December482412
2017January480419
2017February473416
2017March463415
2017April456401
2017May456386
2017June446372
2017July436364
2017August426362
2017September422351
2017October404343
2017November397337
2017December395330
2018January380335
2018February367330
2018March357327
2018April355314
2018May352301
2018June354288
2018July348279
2018August353278
2018September343274
2018October337269
2018November326267
2018December329263
2019January329279
2019February312274
2019March307268
2019April300257
2019May302251
2019June313243
2019July313234
2019August321237
2019September323233
2019October323233
2019November324228
2019December302223
2020January284241
2020February274240
2020March273250
2020April314292
2020May330301
2020June404301
2020July419301
2020August426292
2020September413278
2020October406278
2020November378276
2020December368286
2021January337289
*The unemployment figures for January 2021 are provisional.

More over-25s in work, fewer young people looking for work

On the one hand, unemployment declined because the number of unemployed who found paid work exceeded the number of employed who lost their jobs. In the past three months, the number of employed increased only among the over-25s. On the other hand, unemployment fell as a result of the outflow of unemployed entering the inactive labour force, i.e. those who are no longer immediately available for work and/or no longer seeking work. This outflow also exceeded the flow in the opposite direction. The growth of the inactive labour force concerned young people up to age 25.

UWV: small increase in unemployment benefits in January

At the end of January 2021, UWV provided 289 thousand current unemployment (WW) benefits, 2.9 thousand more than in the previous month (+1.0 percent). This represents a small increase compared to the same month in previous years. In January, the inflow into the unemployment benefit scheme came out slightly higher than the outflow; 40 thousand new WW benefits were granted and 37.2 thousand terminated.

UWV: more benefits in retail trade and accommodation and food services

The sectors with the sharpest increase in WW benefits in January 2021 compared to the previous month included retail trade (+4.2 percent), accommodation, food and catering services (+3.9 percent), temporary employment (+3.7 percent) and culture (+2.4 percent). These sectors suffered from the impact of the stricter lockdown. In addition, due to the usual seasonal effect, the number of benefits rose in the construction sector (+5.3 percent) and in agriculture (+2.1 percent).

Lower number of unemployed

The decline in unemployment over the past three months is the result of underlying flows between the active, unemployed and inactive labour force. This is visualised in the diagram below.

 

In January, 337 thousand people were unemployed. This number stood at 406 thousand three months previously, in October. This means that unemployment declined by 69 thousand over this period (23 thousand per month on average). On the one hand, this was because there were more unemployed who found work (from unemployed to employed) than employed who lost their job and became unemployed (from employed to unemployed). On balance, this resulted in unemployment declining by 39 thousand over the past three months.

On the other hand, unemployment also declined because there were fewer people who started looking without immediate result (from inactive labour force to unemployed) than people who stopped looking and/or were not available (from unemployed to inactive labour force). On balance, this resulted in 30 thousand fewer unemployed. This balance has been negative for three months in a row. The last time such a series occurred was in 2014.

More people in work

The active labour force grew by 57 thousand over the past three months. This was not only because more unemployed entered the labour market than employed people became unemployed (+39 thousand). There were also 192 thousand people who entered the labour market and found work immediately (from inactive to active labour force), while fewer people (174 thousand) stopped working and left the labour market (from active to inactive labour force). As a result, the active labour force grew by another 18 thousand.

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.