April 24, 2020
The restrictions imposed by the government have constricted economic activity. Many businesses have suspended their activities entirely and some have cut down their operations. This report describes the incidence of unemployment and furloughs across different regions, sectors, and groups of workers. Note that furloughs refer to temporary lay-offs.
The set of individuals studied are those who have registered as unemployed or furloughed at the Finnish employment offices (TE-toimistot) during the first half of 2020. As a comparison group, we use the people registering as unemployed or furloughed during the same period in 2019. The background characteristics for each person are obtained from the registries of Statistics Finland. For these, we use the most recent data available from Statistics Finland, which depending on the variable means that the information is either from 2017 or 2018.
Link to the webinar on April 23rd in which the report was published (in Finnish).
- From January 1st to March 15th there was not much of a difference in the onset of unemployment and furlough spells between 2019 and 2020. The situation changed only halfway through March 2020 when the onset of unemployment spells increased somewhat while the number of furloughs jumped up dramatically compared to the same period in 2019.
- The vertical dashed lines in the below figure represent dates on which an action with significant implications for the job market was taken. The first line corresponds to March 18th, when educational institutions were closed and events with more than 10 participants banned. April 1st saw temporary changes in labour laws, allowing employers, for example, to furlough on a shorter notice as well as terminate contracts of trial period employees more easily. Finally, on April 4th, the government closed restaurants.
Demographics and education
- Contrary to normal circumstances, women have been furloughed heavily during the crisis.
- The age distribution of the unemployed does not markedly differ from the previous year, but the furloughed are younger than normal (compared to the furloughed of the previous year), with an especially pronounced difference for women.
- Unemployment and furloughs have become more common at all levels of education.
Level of income
- The unemployed and furloughed have been attributed their earnings in 2018, which is currently the most recent information on income available from Statistics Finland.
- Those who have lost their jobs during the crisis are clearly different in terms of average earnings compared to those losing their jobs in normal times. Right at the beginning of the crisis the furloughed are observed to have markedly lower levels of earnings, though the average seems to have since returned towards normalcy. Those left unemployed during the crisis, meanwhile, have had slightly better paying jobs, and this trend continues on a gradual ascent.
- The earnings distribution of those losing their jobs during the crisis has more middle-income earners than in normal times, while there are a lot less of the very low income (less than 20k€/year) earners. For comparison, the below figure also presents the distribution of all income earners. During the crisis, the earnings distribution of those who have lost their jobs is significantly closer to the distribution of all income earners than in normal times. This is also true for the unemployed and furloughed separately.
- The sum of earnings (according to 2018 information!) for the people furloughed during the last month was around 350 million €. A year earlier, the corresponding “income-at-risk”-earnings of furloughed people were less than 20 million €. The analogous “lost earnings” accumulating to the newly unemployed do not markedly differ from the previous year (the beginning of the year was slightly better than last year in this sense).
- The furloughed and unemployed have been attributed an industry according to the industry of their latest observed employer. The most recent available information on the industries is from 2017.
- The amount of job losses is exceptionally high in all industries, with the very highest numbers recorded in accommodation and food services, trade, and administrative and support services. Relatively few jobs have been lost in public administration and construction.
- Unemployment spells have increased quite evenly across all counties, although the increase has been slightly sharper in Lapland and Uusimaa than elsewhere. Furloughs have exploded everywhere.
- Furloughs and beginning unemployment spells are strongly correlated across municipalities. However, there is a disproportionate amount of the newly unemployed in the municipalities of Lapland, while Uusikaupunki and nearby municipalities have a disproportionate amount of furloughed people.
- Additional information about the Covid-19 Situation Room: https://www.helsinkigse.fi/research-group/covid-19/
- Additional information about the report: Otto Toivanen, firstname.lastname@example.org