The Covid-19 crisis and accompanying slump in economic output in the first half of 2020 left deep scars on the European labour market, with service oriented sectors such as tourism, trade, aviation and economic services such as personnel leasing and the cultural sector being particularly affected.
To cushion the impact of the crisis virtually all member states implemented respectively adapted economic instruments such as working time adjustments and job preserving measures such as short time working. Some member states developed the legal basis for employers to release employees on a short-term basis with a return option or re-employment obligation. In many countries enterprises suffering a decline in demand received financial aid.
The unemployment rates were therefore of limited applicability due to job preserving measures in many countries. Indicators such absenteeism from the workplace or the number of persons without gainful employment depicted the labour market situation in 2020 far more meaningfully.
The number of people absent from work, which peaked at around 36 million during the second quarter of 2020, was at 19.7 m a year later, i.e. just slightly above the figures from the second quarter of 2019, the pre-crisis year. The number of inactive persons in the second quarter of 2020 grew in comparison to the previous year by 6% and was back at the pre-crisis level in the second quarter of 2021.
Whereas the unemployment rate in 2020 was 0.4 percentage points above the level of 2019, across the annual average of 2021 the unemployment rate in the EU 27 states was at 7%, i.e. 0.2 percentage points higher than 2019. The unemployment rate for men was at 6.7% (+0.2 percentage points above 2019) and that of women at 7.4% (+0.2 percentage points).
The labour market situation however developed very differently in the individual member states of the PES network. Seven countries recorded a decrease in the unemployment rate in comparison to 2019, other countries experienced an increase between 0.1 percentage points (Poland, Bulgaria, Denmark) and 2.5 percentage points (Iceland, no data for Liechtenstein).
Figure 1: Unemployment rate in 2021 (15 to 74 years old) and change in percentage points in comparison to 2019
Source: Database – Eurostat une_rt_a; no data for Liechtenstein, timeline break in Norway, deviating definitions in Spain and France
The youth unemployment rate (15 to 24 years old) remained in the 25 member states still clearly above the level of 2019 with just four member states below the pre-crisis level.
Figure 2: Unemployment rate of young people in 2021 (15 to 24 years old) and change in percentage points in comparison to 2019
Source: Database – Eurostat une_rt_a; no data for Liechtenstein, timeline break in Norway, deviating definitions in Spain and France
Long-term unemployment, which rose between 2009 and 2013/14 from 5.4 to over 11 million people as a result of the financial and economic crisis continued to decline in subsequent years but in 2021 rose again for the first time in seven years. Across the annual average of 2021, 2.868 million women and 2.987 million men aged 15 to 74 were out of work for more than 12 months.
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