The labour market did not deteriorate in the fourth quarter
Eesti Panga ökonomist
The tighter restrictions placed on businesses in Harjumaa and Ida-Virumaa and the loss of tourists did not cause the labour market to deteriorate in the fourth quarter of 2020. The labour force survey put the unemployment rate at 7.4%, while there were 2.8% fewer people in employment than a year earlier.
Seasonally adjusted unemployment fell in the labour force survey while the rise in the number of unemployed registered with Töötukassa was mainly the usual seasonal increase. It may equally have become more attractive than before to register as unemployed since the decision in September to allow people to do some work while still receiving unemployment benefits. Data from the Tax and Customs Board on recipients of declared wages also indicate that there was no substantial deterioration in the labour market in the fourth quarter.
There are various factors that explain why the impact of the second wave of the Covid-19 crisis on the Estonian labour market was relatively mild in the fourth quarter. Companies made difficult decisions about cutting numbers of jobs relatively quickly when the crisis first started, which was shown in the relatively larger fall in employment in the second quarter of last year than those seen in other countries. The number of jobs in accommodation and catering fell by around a fifth during the first wave of the virus for example, and has since not fallen substantially further. Tax declarations show that the number of jobs in information and communications and in healthcare increased despite the crisis. Jobs were also preserved in manufacturing because exports increased strongly in the final quarter of last year in the data on foreign trade.