Obviously, this average hides the differences between the EU countries. Most strikingly, in the Baltics, the unemployment rate rose by more than 1.5 percentage points. and, therefore, essential: Estonia (1.7 pp), Latvia (1.8 p.p.) and Lithuania (1.7 p.p.
Moreover, only Romania (1.0 p.p.) and Sweden (1.2 pp) demonstrate an increase in their ratio of unemployment to the total population by more than 1 pp. Sweden, which is often called “model country”, falls even to 23rd place unemployment (from 27 countries).
The study also looked at how inactive people were affected in 2020. While the unemployed are looking for work, this does not apply to inactive people. Focusing on them is important because some of the unemployed may have become disillusioned, thereby partially masking the transition from employment to unemployment with a parallel transition from unemployment to inaction.
In general, the growth in the number of inactive persons at the level of the 27 EU countries also remained rather limited. In 2019, 20.0% of the population was inactive; in 2020 this percentage increased to 20.3%, that is, by 0.3 percentage points. an increase of about 720,000 people…
Again, we see important differences between countries. Inactivity increased dramatically in Southern Europe: Spain (1.1 pp), Italy (1.5 pp), Portugal (0.6 p.p.) and Greece (1.0 p.p. Bulgaria (0.8 p.p.) and Ireland (0.8 pp) are also close to an increase in the number of inactive persons by 1.0 pp.
Generally labor market Poland have experienced the most favorable evolution: Despite the crisis, the share of the unemployed and inactive fell.
Does the small overall effect of 2020 COVID-19 mean that the ominous messages at the start of COVID-19 should be classified as misconceptions?
“Not necessary. The labor market almost always follows the economic growth model at some distance. During the financial crisis, unemployment peaked about a year after the worst economic slowdown. If the current downturn in economic activity continues, it may not be possible to maintain the current level of labor accumulation, especially if support measures are lifted. Much also depends on how European countries manage their accumulated debt: solid savings can be expected to hit the labor market further, while well-thought-out investments can, through their multiplier effect, provide incentives. ”
– Professor Stijn Baert
Download the research paper here. The labor market health indicators used are explained in a new animation video.
Photo – https://mma.prnewswire.com/media/1502767/Ghent_University_2020_Employment.jpg
Professor Stijn Baert
SOURCE Ghent University