In 2017, labour market indicators were positive

Labour market indicators improved throughout the most of 2017, and, in quarterly comparison, were mostly more positive than the respective indicators of the previous year. Although in Estonia, the total number of working-age persons (15–74-year-olds) is falling, the number of persons active in the labour market (the sum of employed and unemployed persons) increased by 7,000 persons, and was estimated at 699,000. The labour force participation rate increased by 1.2 and the employment rate by 1.9 percentage points. The unemployment rate decreased by 1 percentage point. 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 labour market.

In 2017, the estimated annual average number of unemployed persons was 40,000. The unemployment rate was 5.8%, which is 1 percentage point lower than in 2016. The number of unemployed persons decreased by 6,400, while 13,500 previously inactive persons entered the labour market. The unemployment rate in the 4th quarter was 5.3% and the estimated number of unemployed persons 37,000. This is respectively 1.3 percentage points and 8,000 unemployed persons less than in the 4th quarter of 2016. Based on the indicator for 2017, Estonia rather ranks among the European Union 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. Also 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 smaller.

In 2017, the number of inactive persons in the labour market (students, pensioners, homemakers, etc.) among the 15–74-year-olds amounted to 28%. 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 labour force participation rate for older persons (50–74-year-olds) in 2017 was 60.5%, the employment rate 57% and the unemployment rate 5.2%.

The biggest change in the number of inactive persons occurred in the 2nd 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 labour 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 percentage points.

Significant differences in labour 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%). The difference with Ida-Viru county, where the lowest employment rate was recorded (53.9%), was over 20 percentage points. In addition to better job opportunities, different age structure 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 8 percentage points higher than that for women (71.6% and 63.6%, respectively). The unemployment rate for men (6.2%) exceeds the unemployment rate for women by 0.9 percentage points. In 2017, the unemployment rate for Estonians was 4.4% and for non-Estonians 8.8%.

The average number of young people (15–24-year-olds) seeking work in 2017 amounted to 7,000. The annual average labour force participation rate for the young was 45.2% and the unemployment rate 12.1% (in 2016, the respective figures were 42.4% and 13.4%). The unemployment rate is the share of the unemployed in the persons active in the labour market, i.e. in those who work or are seeking work. Compared to the 4th 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 youngsters. The youth unemployment rate dropped to 6.2%, which is an extremely low level for that age group (in the 4th quarter of 2016, it stood at 12.7%). This is the lowest youth unemployment rate in 20 years, i.e. even lower than in the 4th quarter of 2007.

The labour 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% – was 78.5% in 2017. The target level for Estonia was reached already in 2015.

The unemployment rate is the share of the unemployed in the labour force (the sum of employed and unemployed persons). The employment rate is the share of the employed in the working-age population (aged 15–74). The labour force participation rate shows the share of the labour force in the population aged 15–74. The employment gap is the difference between employment rates in percentage points. The estimates are based on the data of the Labour Force Survey.