Emigration slowed the decline in the number of people of working age

Orsolya Soosaar
Orsolya Soosaar
Economist at Eesti Pank
  • Seasonally adjusted employment was higher than in the final quarter of last year
  • Labour productivity declined in 2015, but has started to rise again

Figures from Statistics Estonia show unemployment was 6.5% in the first quarter of 2016 and employment was 1.1% higher than a year earlier. Seasonally adjusted employment was also higher than in the final quarter of last year. Seasonal factors mean the unemployment rate in the first quarter of the year is usually around 0.5 percentage point higher than in the preceding quarter. Unemployment has risen by only 0.1 percentage point this year, which means that the seasonally adjusted unemployment rate fell. Labour force in the economy increased over the year because the participation rate was higher.

The migration balance was positive and so the fall in the number of people of working age in 2015 was notably smaller at only 0.15% than it was in 2014. Statistics Estonia has not yet published migration data by age group, but the population numbers and mortality of the previous year meant that the highest positive balance was for those aged 20-34. Even though there are a lot of students in that age group, the positive net migration boosted the labour supply.

The statistics published today are based on the Estonian Labour Force Survey. Data from Töötukassa, the unemployment insurance fund, on registered unemployment show a similar development. There were more registered unemployed than at the same time last year, but from January to April this year the seasonally adjusted number has fallen in monthly comparison. There were 23% more job offers in the Töötukassa database than a year before, which is in line with the more optimistic employment expectations of companies found by the sentiment survey of the Estonian Institute of Economic Research.

The newly released flash estimate puts economic growth in the first quarter of 2016 at 1.7%. The economy growing faster than employment means that labour productivity started to grow again, having declined by 1.8% in 2015. It is probable that productivity per hour worked also increased, having done so at the end of 2015. Data from the Tax and Customs Board show the rise in the average wage paid out remained at 6.4% in the first quarter of the year, meaning wage growth is still ahead of productivity growth, but the difference between them has shrunk.


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