Unemployment decline sharpest among young people

In July, 4.0 million people aged 15 to 74 years did not have paid work for a variety of reasons. In addition to the unemployed, 3.7 million people were not looking and/or immediately available for work recently. These people are not counted towards the labour force. Their number decreased by an average of 23 thousand per month over the past three months.

Unemployment rate further down in July

In order to enable comparison of cyclical movements in the labour market between countries, the unemployment indicator of the International Labour Organization (ILO) is taken as a measure. According to this indicator, the ‘unemployed’ includes all persons who do not have paid work but who have been looking recently and who are immediately available. This covers the population aged 15 to 74 years. There were 289 thousand unemployed in July, equivalent to 3.1 percent of the labour force. Between March and August 2020, the unemployment rate rose from 2.9 to 4.6 percent. After that, it declined almost continuously.

UWV: number of WW benefits continues to decline

At the end of July 2021, UWV provided 224.2 thousand WW benefits. This is 14.1 thousand fewer than in June, i.e. a 5.9-percent drop. The decrease in the number of current WW benefits started in February and continued in the following months. Since June 2021, the number has been lower than in February 2020, just before the coronavirus crisis. The current low is partly due to the usual seasonal effect in the summer.

UWV: sharp drop in WW benefits in accommodation and food services

The strongest decline in the number of current WW benefits was seen in accommodation, food and catering services: a decrease of 16.1 percent in July 2021. Within this sector, the number of WW benefits in accommodation and food services was lower in particular; the reduction in the catering industry was more limited. Due to the relaxation of the COVID-19 measures, catering establishments can receive more customers and need more staff.

The number of current WW benefits in the education sector increased in July 2021 (+8.1 percent). This development is common during the summer months and is related to the expiration of temporary employment contracts at the end of the school year.

Youth unemployment down

Youth unemployment declined substantially over the past three months, from 128 thousand in April to 107 thousand in July. The number of young people in work grew by 40 thousand during this period. As a result, 7.3 percent of the young labour force aged 15 to 24 years were unemployed in July. This is the lowest level since March 2020, when the unemployment rate among young people was 6.3 percent at the beginning of the coronavris crisis.

Among 25 to 44-year-olds, the number of unemployed stood at 100 thousand in July, slightly more than three months previously. Unemployment among the over-45s did decline, from 90 thousand to 82 thousand over the past three months. In July, the unemployment rate in these age groups was 2.6 and 2.0 percent, respectively. This is virtually the same as in March 2020, when the coronavirus crisis started (2.7 and 1.9 percent respectively).

Unemployment further down over the past three months

The further decline in the number of unemployed 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 July, 289 thousand people were unemployed. This number stood at 316 thousand three months previously, in April. Unemployment declined by 27 thousand over this period (9 thousand per month on average). As shown in the above diagram, unemployment can decline when there are more unemployed who find work than employed who lose their job and become unemployed. However, unemployment can also decline when there are more unemployed who stop seeking work than people who come from the inactive labour force and start seeking work. In the past three months, unemployment fell only because of the former: there were more unemployed who found a job than employed who lost their job. On balance, this resulted in unemployment declining by 34 thousand. In July, there were slightly more people who started seeking work with no direct result (from inactive labour force to unemployed) than unemployed who stopped seeking and/or were not available (from unemployed to inactive labour force). As a result, unemployment rose by 8 thousand over the past three months, on balance.

Developments since 2018

2020 was a turbulent year for the labour market. Due to the outbreak of the coronavirus crisis in March 2020, the number of employed declined and unemployment rose rapidly. Unemployment grew from both sides (net inflow was positive from both the active and inactive labour force). From November 2020 to March 2021, the opposite was true (both negative) and unemployment fell rapidly again. In the period April-June of this year, there was hardly any net inflow from the inactive labour force. This inflow was positive again in July, which curbed the fall in unemployment to some extent. Compared to last year, the number of employed increased considerably.

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.