Unemployment increased rapidly in the 3rd quarter

The unemployment rate which had remained near 4% in the last four quarters increased to the highest level of the last two years in the 3rd quarter of 2008. The number of unemployed people grew to 44,000. Nearly half of them have got unemployed due to reduction, closing down or bankruptcy of enterprise, of which 11,000 had lost a job during the last six months.

In the 3rd quarter also the youth unemployment increased, because school graduates started to seek for a job. The unemployment rate of persons aged 15–24 increased to 14.7%. This year the young people have more difficulties to find a job because last years’ lack of labour force is going to be replaced by lack of work in current conditions of declining economy, especially as the numerous generation of singing revolution of Estonia is entering the labour market now.

Unemployment rate and youth unemployment rate, 1st quarter 2002 — 3rd quarter 2008

The unemployment increased in all regions, but most in Northeastern Estonia. If in other regions the unemployment rate was 5–6%, then in Northeastern Estonia nearly two times higher — 11.8%. Northeastern Estonia was the only region where the unemployment grew on account of remarkable decrease in employment. In other regions the employment remained at the same level or slightly increased.

By economic activities the employment decreased in agriculture, construction, transport, storage and communication, health and social work, other community, social and personal service activities. At the same time the number of persons employed in manufacturing, trade, real estate, renting and business activities increased. The total number of employed persons in the 3rd quarter of 2008 was 660,500, which is only 0.2% less than a year ago (662,100).

The unemployment increased also on account of increasing economic activity of the population. The economically inactive persons aged 15–74 numbered 338,000 in the 3rd quarter, which is 17,000 less than a year ago. The inactivity decreased most due to declining number of students. At the same time when the children of the singing revolution are in transition from school to labour market, the generation of students replacing them is already much smaller. Youth aged 15–16 at present are born in years when the number of births remarkably decreased. Among inactive persons the number of non-working pensioners and persons taking care of children or other members of family has decreased as well. Due to more difficult economic situation the persons reaching pension-age prefer to continue working if possible and housewives have started to seek for a job.

Unemployment rate is the share of the unemployed in the sum of employed and unemployed persons. The estimates are based on the data of the Labour Force Survey. Statistics Estonia has been conducting the Labour Force Survey since 1995 and every quarter 5,000 persons participate in it. The Labour Force Survey is carried out by statistical organisations in all European Union Member States on the basis of harmonised methodology.