Analytics, Employment, Estonia

The unemployment rate, which had remained within 4% in the first half of 2008, increased rapidly in the second half of the year and rose to the highest level of the last three years in the 4th quarter.

The annual average unemployment rate, which had continuously decreased in 2000–2007, increased to 5.5% in 2008. A year earlier, the unemployment rate had been 4.7%. By counties, the unemployment rate varied from 4% in Pärnu county to 10% in Ida-Viru county. The unemployment rate was remarkably high also in Põlva county (8.9%) and Valga county (8.5%).

In the last quarter of 2008, the number of unemployed people grew to 54,000. Only about a half of them (26,000) were registered at the Labour Market Board. Mainly the young unemployed persons believe they can manage without the help of Labour Market Board. Only every fourth unemployed person aged less than 25 but almost two thirds of unemployed persons aged over 50 were registered at the Labour Market Board. People who have become unemployed recently and who have the right to receive the unemployment insurance benefit or unemployment allowance register more actively.

The number of people who have lost their jobs due to lay-off, close-down or bankruptcy of enterprise started to increase in the beginning of 2008 already. As the number of new unemployed people continuously increased, the share of long-term unemployment started to decrease. In earlier years the share of the unemployed with duration of unemployment for more than a year had been around 50%, but in the end of 2008 it decreased to 26%. The share of long-term unemployment decreased, but in the second half of the year their number still started to increase rising to 14,000 in the 4th quarter.

Unemployed persons by duration of unemployment, 2005–2008

The employed persons numbered 653,000 in the 4th quarter, which is 8,000 less than in the 3rd quarter. Compared to the 4th quarter of 2007 the number of employed persons decreased by 0.2%. At the same time, the structure of employment changed. The decrease of employment in agriculture and industry was accompanied by the increase in the share of services sector. 64% of employed persons were working in the services sector in the 4th quarter of 2008, whereas a year earlier the percentage had been 60.5%. By economic activities, the number of employed persons decreased most in agriculture, construction and manufacturing. The number of persons employed in trade increased most.

In the 1st quarter of 2008 compared to the same quarter of 2007, the number of employed persons still increased, in the following quarters it already decreased. All in all, the annual average employment was 0.2% bigger in 2008 than a year earlier.

The economic activeness of the population increased in 2008. The number of inactive persons aged 15–74 was 348,000, which is 11,000 less than a year earlier. The number of persons inactive due to studies decreased most. It was caused by the decreasing number of students as well as by the increasing number of youth studying and working at the same time.

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.