Labour Market Indicators and Unemployment Rate

Labour Market Indicators

• Several labor market indicators exist to analyze the labor market.
• These figures provide a view of the labor market and enable the deduction of specific movements and evolutions.
• Both Statbel and the VDAB provide figures and statistics.
• The VDAB (Flemish Employment and Vocational Training Service) brings together supply and demand in the labor market at the Flemish level.
• Belgian statistics on labor can be found on the website of the Federal Public Service Economy.
• Eurostat, the statistical office of the European Union, is consulted for comparative studies with Europe.
• Different agencies sometimes use various methods and definitions, therefore always check the source when comparing studies.

Unemployment Rate

• Labour Force = employed population + unemployed population.
• Unemployment rate = (unemployed population / labour force) * 100.
• The unemployment rate indicates the percentage of unemployed within the labour force.

Participation or Activity Rate

• Participation rate or activity rate = (labour force / population of working age) * 100.
• The participation or activity rate indicates the percentage of working and non-working job seekers within the population of working age.

Employment Rate

• Employment rate or employment rate = (number of employed / population of working age) * 100.
• The employment rate indicates the percentage of employed within the population of working age.

Labor Market Policy

• Government uses labour market policy to take various measures to promote employment and limit unemployment.
• Labor market indicators are used to analyze the policy.
• The federal government has some powers to implement labor market policy at the federal level.
• These powers include imposing quotas, responding to labor costs, a general reduction for social security, NSSO reductions in sectors, reductions in personal NSSO contributions, the income guarantee benefit and measures through labor law.
• The Flemish government contributes to an active labor market policy.
• For example, ensuring more people are part of the labor force by encouraging unemployed people to work, raising the retirement age.
• Inspiration for measures to increase the employment rate can be drawn from other countries.
• The government uses all labor market indicators to map out a more active labor market policy.

Concepts

• Labor market policy consists of all measures that the government can take to promote employment opportunities and to reduce unemployment.
• Labor market indicators provide information to analyze the labor market and map the movements and evolution.
• The labor force consists of the part of the population that is working or unemployed.
• The working-age population is the portion of the population between 15 and 64 years.
• Cyclical unemployment arises from a pessimistic view of the economic situation in a country.
• Frictional unemployment is the limited temporary unemployment when looking for a new job.
• Youth unemployment is defined as unemployment among those younger than 25 years.
• The non-economically active population includes those who are not working, not available for work and/or not and not actively looking for work.
• The participation rate (activity rate) expresses the ratio between the labor force and the working-age population.
• Seasonal unemployment is unemployment during certain periods (seasons) when there is no work in a particular sector.
• Structural unemployment is a form of unemployment where the supply and demand of labor is not well aligned or there are insufficient jobs relative to the number of graduates.
• Temporary unemployment occurs when people cannot work for a specific period due to force majeure or weather conditions.
• The VDAB is the Flemish Employment and Vocational Training Service.
• Hidden unemployment is a special form of structural unemployment where people cannot find employment.
• Voluntary unemployment refers to people who resign themselves to the unemployment situation and no longer find it necessary to participate in the labor market.
• Unemployment rate is the percentage of unemployed in the labour force.
• Employment rate (employment rate) is the percentage of employed in the working-age population.

The Labour Force

• The total population is divided into the working-age population (15-64 years), -15 year olds and 65-plussers.
• The working-age population is divided into the labour force and the non-economically active population.
• The labour force consists of all residents aged 15 to 64 years who are working and those available for and actively looking for work.
• The non-working job seekers (NWWZs) are the unemployed with the highest degree of availability for the labor market.
• The non-economically active population includes all people who are not working, not available for work, and/or not actively seeking work, such as students, youth under 15, housewives or -men, and pensioners.

Unemployment

• Several factors in the labor market cause unemployment to be problematic.
• There are more challenges to reduce unemployment:
  • There are still many job seekers with a migration background.
  • 60-plussers need to be reactivated.
  • Long-term unemployed have to be reactivated.
  • The ratio between the number of job seekers and inactive people is too large.

Types of Unemployment

• Several types of unemployment can be distinguished depending on the cause:
  • Frictional unemployment is limited temporary unemployment while looking for a new job.
  • Cyclical unemployment arises from a pessimistic view of the economic situation in a country.
  • Temporary unemployment occurs when people cannot work for a specific period of time due to force majeure or weather conditions.
  • Seasonal unemployment is unemployment during certain periods (seasons) when there is no work in one sector.
  • Structural unemployment exists when supply and demand are not well aligned or there are not enough graduate places.
  • Voluntary unemployment is when people resign to the situation of unemployment and do not see the need to take part in the labor market.
  • Hidden unemployment: specific form of structural unemployment where people can partly or completely fill their place on the labor market (job at a lower level than diploma)
  • Youth unemployment occurs when younger people are without work for twelve hours a week or more and directly available on the labor market.
• When analyzing youth unemployment among school leavers, specific characteristics can be identified, such as the lack of the right diploma (underqualified) and/or a lower educational level.

Explore labor market indicators from sources like VDAB and Eurostat. Understand how the unemployment rate is calculated using the labor force, and its significance in analyzing market trends. Always verify source when comparing labor market data.