According to information released by Statistics Estonia on Wednesday, in 2017, the unemployment rate was 5.8 percent, the employment rate 67.5 percent, and the labor force participation rate 71.6 percent.
In the second quarter, unemployment increased temporarily, primarily due to an increased number of previously inactive persons entering the labor market. Employment and labor force participation remained high throughout 2017, reaching the highest levels in 20 years. In the fourth quarter, the youth (15-24-year-olds) unemployment rate was very low at 6.2 percent.
Labor market indicators improved throughout the most of last year, and, in quarterly comparison, were mostly more positive than the respective indicators of the previous year. Although the total number of working-age persons (15-74-year-olds) in Estonia is falling, the number of persons active in the labor market (the sum of employed and unemployed persons) increased by 7,000 persons, totaling an estimated 699,000.
The labor force participation rate increased by 1.2 and the employment rate by 1.9 percent. The unemployment rate decreased by one percent. The number of inactive persons continued to decline. The annual average number of inactive persons was 277,000, which is 13,500 persons less than in 2016. The number of employed persons has increased due to a fall in unemployment as well as an increase in the number of previously inactive persons entering the labor market.
In 2017, the estimated annual average number of unemployed persons was 40,000. The unemployment rate was 5.8 percent, which is one percent lower than in 2016. The number of unemployed persons decreased by 6,400, while 13,500 previously inactive persons entered the labor market. The unemployment rate in the fourth quarter was 5.3 percent, and the estimated number of unemployed persons 37,000; this is respectively 1.3 percent and 8,000 unemployed persons less than in the fourth quarter of 2016. Based on the indicator for 2017, Estonia rather ranks among EU countries with lower unemployment.
The unemployed at the greatest risk of poverty are the long-term unemployed, i.e. those who have been seeking work for more than 12 months. In 2017, there were 1,300 fewer persons who had been unemployed for a long time. The number of persons who had been unemployed for a short time and the number of discouraged persons, i.e. persons who had lost hope of finding a job, were lower as well.
In 2017, the number of inactive persons in the labor market (students, pensioners, homemakers, etc.) among 15-74-year-olds totaled 28 percent. The number of inactive persons decreased primarily due to an increase in the number of those who were inactive due to ongoing studies, pregnancy, maternity or parental leave, or retirement age. There were on average 1,000 fewer persons inactive due to illness or injury than in 2016. The labor force participation rate for older persons (50-74-year-olds) in 2017 was 60.5 percent, the employment rate 57 percent and the unemployment rate 5.2 percent.
The biggest change in the number of inactive persons occurred in the second quarter of 2017, when the number of inactive persons fell by 17,000 persons compared to the preceding quarter. The number of inactive students in the labor market decreased by 7,200 persons and the number of persons inactive due to illness or injury by 5,700 persons. As a result, the unemployment rate increased temporarily by 1.4 percent.
Significant differences in labor market indicators by place of residence, sex and ethnic nationality still exist. In 2017, the highest employment rate was recorded in Harju County (74.2 percent); the difference with Ida-Viru County, where the lowest employment rate was recorded (53.9 percent), was over 20 percent. In addition to better job opportunities, different age structures also had an impact on the results. In 2017, compared to 2016, the employment rate for both men and women increased, but the rate for men remained eight percent higher than that of women (71.6 percent and 63.6 percent, respectively). The unemployment rate for men (6.2 percent) exceeds the unemployment rate for women by 0.9 percent. In 2017, the unemployment rate for Estonians was 4.4 percent and for non-Estonians 8.8 percent.
An average of 7,000 young people between the ages of 15-24 sought work in 2017. The annual average youth labor force participation rate was 45.2 percent, and the unemployment rate 12.1 percent. In 2016, in comparison, the respective figures were 42.4 percent and 13.4 percent. The unemployment rate is the share of the unemployed in the persons active in the labor market, i.e. in those who work or are seeking work.
Compared to the fourth quarter of 2016, the number of unemployed young people and that of inactive persons fell at the end of the year. The decrease in the number of inactive persons is partly due to a decrease in the total number of young people. The youth unemployment rate dropped to 6.2 percent, which is an extremely low level for that age group; in the fourth quarter of 2016, in comparison, this indicator stood at 12.7 percent. This is the lowest youth unemployment rate seen in 20 years, coming in even lower than in the fourth quarter of 2007.
The labor force participation rate for 20-64-year-olds — one of the indicators in the Europe 2020 strategy, according to which, the aim of Estonia is 76 percent — was 78.5 percent in 2017. Estonia's target level was reached in 2015 already.
Editor: Aili Vahtla