Unemployment up again

In August, 3.7 million people aged 15 to 74 did not have paid work for a variety of reasons. Aside from the unemployed, 3.3 million people were not looking and/or immediately available for work; they are not counted towards the labour force. This mainly concerns people who are retired or unable to work due to illness or disability. Their number has dropped by an average of 9 thousand per month over the past three months.

Unemployment rate up in August

In order to enable comparison of cyclical developments in the labour market across countries, the unemployment indicator of the International Labour Organization (ILO) is used as a measure. According to this indicator, the unemployed are those who are not in paid work, but have been looking recently and are immediately available. This figure refers to the population aged 15 to 74 years. In April 2022, unemployment came out at 3.2 percent, the lowest rate in the series with monthly figures as of 2003. It subsequently increased to 3.8 percent in August, i.e. back to the level of the end of 2021.

Not all unemployed people receive a benefit. Those who were not previously working but start looking for work and are available are also counted towards the unemployed. However, they are not entitled to receive a WW benefit.

UWV: number of benefits further down in August

At the end of August 2022, UWV was providing nearly 152 thousand WW benefits. This is nearly 5 thousand fewer than in the previous month (-3.1 percent). Relative to August 2021, the number of WW benefits was down by almost 61 thousand (-28.7 percent). In August 2022, there were over 14 thousand new WW benefits; more than 19 thousand were terminated.

UWV: fewer benefits in all sectors except for education

In August, the number of current WW benefits declined across virtually all sectors, except for education (+14.7 percent). This is a usual development for the summer months and is related to the expiration of temporary employment contracts at the end of the school year. Just as in the past few months, in August the largest decrease in WW benefits occurred in the sectors accommodation and food services (-6.3 percent) and construction (-5.7 percent), although the decrease was less than in previous months.

Mainly fewer young people in work

In August, there were 9.5 million people in work. Over the past three months, the number of people in employment has decreased by an average of 3 thousand per month. The net labour participation rate - the percentage indicating how many people aged 15 to 74 years in the population are in paid work - declined from 72.3 percent in May to 72.1 percent in August. The decrease occurred almost exclusively among 15 to 24-year-olds. Net labour participation in this group fell from 76.1 to 74.9 percent. It hardly changed among 25 to 44-year-olds and 45 to 74-year-olds.

More job losses

The rise in unemployment over the past three months (by 55 thousand in total and by 18 thousand per month on average) is the result of underlying flows between the active, unemployed and inactive labour force. This is visualised in the diagram below.

The diagram shows that unemployment may increase not only because people in work lose their job, but also because people enter the labour force who were not previously part of it. As soon as they start seeking work and are available, they also become part of the unemployed.

The inflow from the inactive labour force is usually the most important reason for unemployment growth. This was also the case in the previous months, but in June, July and August, the inflow of employed who had lost their job increased, while the flow from unemployed to employed labour force became slightly smaller. On balance, in August this resulted in the smallest outflow from unemployment to employment (5 thousand) since the beginning of this year.

As of May, the balance of inflow from the inactive labour force to unemployed labour force (61 thousand) was higher than earlier this year. This resulted in unemployment growth of 55 thousand since May, or 18 thousand per month on average. Due to the smaller outflow into employment and the larger inflow from the inactive labour force, unemployment rose from 323 thousand in May to 378 thousand in August.

Every month, CBS publishes figures on the Dutch 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.