Situation room report 27.5.2021 – latest developments in the labor market, households and firms

May 27, 2021

The Helsinki GSE situation room continues to publish reports based on up-to-date data every other week. The reports follow the economy’s development from the labor market’s, households’ and firms’ perspectives. In this report, we focus on the labor market and households.

The background information for the figures has been collected from the Statistics Finland’s registers.

Labor market

Labor market – earnings

The figure below shows monthly earnings in 2019–2021 based on the Incomes Register. Since April 2020, the wage sum has mostly been lower than for the same month in the preceding year, apart from a few exceptions, with the greatest fall happening in May. Wages for January 2021 are below the previous year’s level as well, although slightly higher than for 2019. Apart from January the wage sum appears to be higher in 2021 compared to the previous years.

When examining the earnings figures, please keep in mind that information is uploaded to the Incomes Register with varying degrees of lag, and the figures may be slightly updated later when new data becomes available. In practice, data older than one month, as for April 2021 in this report, can be considered almost final.

The figure below compares the industry-level earnings in April from 2019 to 2021. Earnings in manufacturing, public administration and health and social care appear to be increased the most in April 2021.

The next two figures show the developments of wage sum in municipalities in 2019 – 2021. The first figure shows the April wage sum in the largest 20 municipalities. The second figure shows the ten municipalities with the lowest and the highest changes in wage sum for 2021 from 2019 levels.

Within these municipalities, the largest increases are seen in Lapua (9.6 %), Ylivieska (8.6 %) and Seinäjoki (8.2 %). Earnings decreased the most in Jämsä (-3.0%), Hyvinkää (-2.3%), and Kuusamo (-1.9%).

Next, we examine the changes in earnings in April from 2019 to 2021 by age group. In April 2021, earnings fell most among those under the age of 25 compared to the previous two years. In other age groups, earnings increased or remained approximately at the level of the previous year.

The next figure illustrates the relative changes in earnings by profession, listing professions that experienced the largest reductions or increases in earnings in April 2021 from April 2019.

Labor market – furloughs and layoffs

The figure below shows the weekly new furlough and unemployment spells from 2019 to 2021. The amounts of new spells increased substantially in the beginning of the crisis, but new entries into unemployment or furloughs have in general declined afterwards. Amounts of new furlough spells, however, have continued to be significantly above the levels of the preceding year since March 2020.

Labor market – employment

Below, we present the weekly amounts of employed in 2019 – 2021. Here, a person is considered employed if they receive at least 1 000 euros of wage income over a month. According to this definition, we find that the number of employed has been significantly smaller in early 2021 than in previous years, although slightly higher than it was at the lowest point of 2020 in April. Employment data is slower in updating than earnings data, so the data for April should be considered with caution.

Firms

Firms – the number of bankruptcy applications

The figure below shows the development of cumulative amount of bankruptcy applications during years 2018-2021. From the figure we can see that this development has been very similar during years 2018 and 2019. In 2020 however, the amount of filed bankruptcy application was significantly lower after the beginning of summer. In January 2021 the development was slower that in January 2020, but seems to have increased later on and currently following year’s 2019 path.

Next figure shows the number of new bankruptcy applications on monthly basis during the years 2019, 2020 and 2021. This figure reinforces observations from the previous figure

The following figures show the quantity of new bankruptcy applications during years 2019, 2020 & 2021 categorized by county, industry and firms’ size class.

It is noteworthy that firms with 26-250 employees are the largest group among firms filing for bankruptcy, because firms within this size class are a very significant group in terms of employment and wages.

Households

Households – housing allowance

Below, we illustrate the number of applicants for Kela’s housing allowance from January to April in 2019 – 2021. We find that especially in February 2021 the number of applicants was above the levels of the previous two years.

Households – unemployment benefits

The figure below displays the number of applicants for Kela’s unemployment benefits from the beginning of the year in 2019 – 2021. The number of applications is fairly similar for every year in January and February. We observe a significant increase in applications in March and April 2020. However, the number of applications in these months has decreased in 2021.

Please note that these figures do not include the earnings-related unemployment allowance paid by unemployment funds. Additionally, the figures illustrate the numbers of new applications rather than all those collecting benefits of a given type.

In the figure below, we compare the number of applicants for Kela’s unemployment benefit by age and gender in early 2019 and 2021. Compared to 2019, the number of applicants seems to be higher among women aged 20-24 in early 2021. In turn, the number of applicants is lower especially among men and women aged 50-60.

Finally, we examine the amounts of applications by household type. Compared to 2019, the number of applicants for Kela’s unemployment benefit was lower among persons living alone in early 2021. Amounts of furloughed applicants increased the most among single family households.

  • Additional information about the Helsinki GSE Situation Room consisting of researchers from Helsinki GSE, University of Turku, VATT Institute of Economic Research and Statistics Finland:  https://www.helsinkigse.fi/research-group/covid-19/
  • Additional information about the report: Otto Toivanen, otto.toivanen [at] aalto.fi
  • Suggested citation in mediaCite Helsinki GSE Situation Room as the source with a link to www.helsinkigse.fi website.
  • Suggested citation in academic publications: please contact otto.toivanen [at] aalto.fi