The new wave of the virus had little effect on the labour market
Economist at Eesti Pank
The unemployment rate was 7.1% in the first quarter of this year, similar to unemployment in the previous quarter.
Data from Statistics Estonia show that there were 2.5% fewer people in employment than a year earlier and seasonally adjusted employment was higher than in the previous quarter. There were 640,700 people in employment, which was more than in the second quarter of last year when the crisis hit the labour market very hard. Data from the Tax and Customs Board on declared wages show a similar, 3% decline in employment in the first quarter compared to the same time a year earlier, while the rise in the number registered as unemployed compared to the fourth quarter of 2020 was comparable to the fall in employment found from the labour force survey during the same period. This suggests that the labour force survey, which is based on a survey questionnaire, is in line with register data.
The new wave of the coronavirus crisis at the start of the year and the new restrictions introduced to stop the spread of the virus undoubtedly affected the labour market. The first wave of the virus showed that the Estonian labour market is flexible and more jobs were cut than in other countries when the first economic hit was delivered. The easing of the restrictions last week and the lifting of many of them from today should help to accelerate employment growth. Sentiment surveys show that employers that are already feeling labour shortages have become optimistic about further growth in employment. This spring and summer the recoveries in both the economy and labour market will be boosted by foreign trade, increased household savings, and greater confidence about the future as vaccination continues to spread.