No major changes in the labour market

news release no 19

According to Statistics Estonia, in 2016, the unemployment rate was 6.8%, the employment rate 65.6% and the labour force participation rate 70.4%. Within a year, 8,300 additional people entered the labour market, which mainly results from the decrease in the number of inactive persons. Compared to 2015, the number of inactive people in the labour market has decreased by 9,700 persons.

In the 4th quarter of 2016, compared to the 4th quarter of 2015, the unemployment rate increased by 0.2 percentage points. The number of unemployed persons in the 4th quarter of 2016, compared to the same quarter of the previous year, increased by 1,200 persons. The employment rate remained at the same level than in the 4th quarter of 2015, i.e. 65%.

In 2016, the number of active persons in the labour market was estimated at 691,400, of which 644,600 were employed and 46,700 unemployed. The unemployment rate increased in 2016, compared to 2015, by 0.6 percentage points. The number of unemployed persons has been decreasing since 2011, but increased in 2016, compared to 2015, by 4,400 persons. The increase in the number of unemployed persons was caused by the decrease in the number of inactive persons, which results partly from the Work Ability Reform.

In 2016, there were 26,400 unemployed males and 20,400 unemployed females in Estonia. Although the number of active people in the labour market increased rapidly in the 2nd and 3rd quarters of 2016, the year as a whole did not bring about any major changes.

The labour force participation rate, i.e. the share of the labour force in the population aged 15–74 increased in 2016, compared to 2015, by 1 percentage point. Although there were no major changes in the employment rate in 2016, it did increase among males and females, reducing the employment gap by 0.4 percentage points, reaching 7.6 percentage points. The employment gap among the population aged 25–49 was 12.7 percentage points in 2016, which is 0.8 percentage points higher than in 2015.

In 2016, the number of inactive working-age persons in Estonia, aged 15–74, was 290,800 persons, which is about 10,000 persons less than in 2015. The main reasons for being inactive in the labour market are still retirement, ongoing studies and illness or disability.

Although the main reason for being inactive among both males and females is retirement, in 2016, the number of females who are inactive due to retirement decreased the most, while in the case of males, the biggest decrease occurred among those who stay outside the labour market due to illness or disability. In 2016, compared to 2015, the number of inactive persons in the labour market among the population in prime working age (persons aged 20–64) decreased by 6,000 persons, with the number of inactive persons in 2016 reaching 144,600 persons, which is also the smallest number of inactive persons aged 20–64 since regaining independence.

Diagram: Labour force participation rate, employment rate, unemployment rate

The unemployment rate is the share of the unemployed in the labour force (the sum of employed and unemployed persons). The employment rate is the share of the employed in the working-age population (aged 15–74). The labour force participation rate shows the share of the labour force in the population aged 15–74. 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 the survey. The Labour Force Survey is carried out by statistical organisations in all the European Union Member States on the basis of a harmonised methodology.

For further information:

Heidy Roosimägi
Leading Statistician-Methodologist
Methodology and Analysis Department
Statistics Estonia
Tel +372 625 9292

More detailed data have been published in the Statistical Database (employed persons, inactive persons, employees, unemployed persons, general data on the labour market).