Estonia's third quarter unemployment jumps 2.3% on year to 7.5%
The Estonian unemployment rate was 7.5 percent in the third quarter of 2016, a 2.3-percent increase year over year on 2015, Statistics Estonia reported on Monday.
The rate of employment during this year’s third quarter was 66.5 percent. The labor force participation rate increased by one percent compared to the same quarter last year, while the number of inactive working-age people was on a downtrend.
Estonia’s registered unemployment rate increased by 2.3 percent year over year and by one percent compared to this year’s second quarter.
The number of unemployed persons was estimated to be 53,000 in this year’s third quarter, about half of whom had been unemployed for less than six months. The increase in the number of unemployed people was mainly due to a decrease in the number of inactive persons, which may have been significantly influenced by the Work Ability Reform launched in 2016.
The labor force participation rate, i.e. the share of the labor force in the population aged 15-74, increased by 1 percent compared to the third quarter of last year, indicating that approximately 9,000 more persons had entered the labor market. This indicator has increased the most for 15 to 24-year-olds — approximately 3,000 young persons have entered the labor market during the past year.
The labor force participation rate increased both for men and women. The labor force participation rate for women was 66.4 percent in the third quarter of 2016, 0.8 percent higher than in the same quarter of 2015, while the indicator for men of the same age group stood at 75.7 percent in the third quarter of 2015 and at 77 percent in the third quarter of 2016.
The increase in the labor force participation rate has been faster in rural areas than in urban areas. Compared to the third quarter of the previous year, the activity rate has increased by 2.4 percent in rural areas and by just 0.4 percent in urban areas.
The estimated number of employed persons in Estonia was 653,000 in the third quarter of this year. The employment rate fell by 0.7 percent compared to the third quarter of 2015 and by 0.4 percentage points compared to the second quarter of 2016.
The employment rate of 15 to 74-year-old women was 62.6 percent in the third quarter of 2015, lower by 0.5 percent than that the same quarter of this year. There was also a slight reduction in the indicator for men of the same age group — from 72.2 percent in the third quarter of last year to 71.2 percent in the third quarter of 2016.
The number of persons inactive in the labor market has been decreasing steadily in 2016 —compared to the third quarter of 2015, the number has declined by about 10,000. There has been a remarkable fall in the number of inactive persons aged 50-74 as well — compared to the third quarter of the previous year, approximately 5,000 persons belonging to this group have entered the labor market. More than half of them, about 3,000 persons in total, were women and this may have resulted from the increase in the pensionable age of women.
Although the primary reasons for being inactive in the labor market remained retirement, ongoing studies, illness or disability, the reduction in the number of inactive persons has happened mainly on the account of people who were inactive for these same reasons.