Employment situation, OECD, fourth quarter 2020

OECD area employment rate rose by 1.0 percentage point in the fourth quarter of 2020, but remains below pre-pandemic level

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15 Apr 2021 – The OECD area employment rate – the share of the working-age population with jobs – rose by 1.0 percentage point in the fourth quarter of 2020, to 66.7%, remaining 1.9 percentage points below the rate observed in the first quarter of 2020. In the same period, the OECD labour force participation rate (i.e. the share of people of working-age who are either employed or unemployed) increased by 0.4 percentage point, to 71.7%, still 0.9 percentage point below its level in the first quarter of 2020.

Some care is needed in interpreting the latest developments in the OECD employment rate, as a large part of the increase in the third and, to a lesser extent, fourth quarter of 2020 reflects the return to work of furloughed workers in Canada and the United States, where they are recorded as unemployed, whereas in most other countries, they are recorded as employed. Indeed, the sharp increase in the number of furloughed workers in the second quarter of 2020 made a large contribution to the fall in the employment observed in these two countries.

In the euro area, the employment rate continued to increase, to 67.3% in the fourth quarter of 2020 (from 66.8% in the third quarter). However, it remained 0.7 percentage point below the rate observed in the first quarter of 2020. Compared to the third quarter, the largest increases (of 1.0 percentage point or more) in this area were registered in Estonia (to 74.1%), Luxembourg (to 68.0%), and Portugal (to 69.5%).

In the United States, the employment rate continued to increase by 1.5 percentage points, to 67.9%, in the fourth quarter of 2020, then by 0.5 percentage point, to 68.4%, in the first quarter of 2021. This is a slower pace than in the third quarter of 2020, as the number of furloughed workers returning to work diminished. However, in the first quarter of 2021, the employment rate remained 2.9 percentage points below the rate observed in the first quarter of 2020.

In the fourth quarter of 2020, large increases (of 1.4 percentage points or more) were observed in Colombia (to 59.9%), Chile (to 55.5%), Mexico (to 59.1%), Canada (to 72.0%) and Australia (to 73.5%). The employment rate increased marginally in Japan (to 77.3%), while it declined by 0.3 percentage point in the United Kingdom (to 75.0%) and Israel (to 65.8%).

In the fourth quarter of 2020, the youth (aged 15 to 24) employment rate (up by 1.4 percentage points, to 39.6%) continued to rise faster than that for the OECD as a whole.

Persons employed and persons unemployed on temporary lay-off in the United States, Millions of persons

Link to underlying data – Source: Quarterly Labour Market Statistics, OECD

(1) The chart provides a more comparable view of movements in US employment statistics with movements in most other OECD countries, where furloughed workers are included in official employment statistics. It should however not be interpreted as alternative official statistics for the United States. In this chart, the number of employed covers age group from 16 to 64, while the number of unemployed on temporary lay-off covers age group 16 and over.

(2) US Current Population Survey data

The measures put in place by national governments to reduce the spread of the Coronavirus (Covid-19) may have impacted on the ability to field surveys, and so, in turn, on the quality of statistics typically produced. In addition, because of differences in national practices used to determine whether individuals are unemployed when under confinement, international comparability has also been affected. See the note on the divergence in employment and unemployment statistics during the Covid-19 crisis on page 2.

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