Transitions on the labour market

Unemployed people remain unemployed less often, but make the transition to inactivity more frequently

Work & training
Unemployed people remain  unemployed less often, but make the transition to inactivity more frequently

Statbel publishes today the transitions on the labour market between the third quarter of 2021 and the third quarter of 2022. These figures indicate that people still stay in employment easily and that unemployed people find a job more easily than in the last quarter. Moreover, the share of people leaving unemployment to become inactive is on the rise again. While between the second quarter of 2021 and the second quarter of 2022, 31.1% of the unemployed people found work, between the third quarter of 2021 and the third quarter of 2022, this increased to 33.8%. At the same time, the percentage of unemployed people who made the transition to inactivity (as defined by the ILO definition) rose from 26.7% to 32.8%.

Introduction

To assess the situation of the labour market, it is not only important to know how many people are unemployed, inactive and employed, but also how many people change their status within a given period of time. How many of the unemployed in this quarter were also looking for work a year earlier? How many of them have gone into work? What percentage of working people were also working a year earlier? Questions that can be answered with the Labour Force Survey, as this is a survey in which respondents are questioned several times.

In this press release, we discuss the evolution of the labour market status of people who were employed, unemployed or inactive one year ago (third quarter of 2021) and compare it with their status in the current quarter (third quarter of 2022). We focus here on the population aged 15 to 74. We also publish the comparison between the status in the previous quarter (second quarter of 2022) and the status in the current quarter (third quarter of 2022). These figures are not discussed in this text, but can be found under Figures on the website.

Employed

A very high percentage of people who were employed a year ago are still working today. 94.4% of employed people who were employed in the third quarter of 2021 are still employed in the third quarter of 2022. In addition, 1.6% of employed people have become unemployed a year later and 4.0% are inactive. These figures remained fairly stable compared to the previous quarter.

If we look at these figures for different groups, we see that the percentage of people who stay in work is high everywhere: for men and women, in the three regions and for people with and without the Belgian nationality. There are larger differences only for age and level of education. Among 30-74 year olds, 96.6% remain in work, compared to 83.9% among 15-29 year olds. Highly-skilled people (those with at least a higher education diploma) easily stay in work: of the persons employed in the third quarter of 2021, 96.3% are still in work a year later. The percentage of low-skilled people who stay in work is lower: 87.5% of low-skilled people who were employed in the third quarter of 2021 still have a job one year later. The gap between the low-skilled people and the high-skilled people did narrow slightly this quarter compared to last quarter.

Unemployed

Last quarter, it was noticeable that unemployed people seemed to find it more difficult to make the transition to work. A fairly large percentage of the unemployed in the second quarter of 2021 turned out to be still unemployed a year later (42.2%). A quarter later, that percentage has dropped significantly. Only 33.4 per cent of the unemployed people in the third quarter of 2021 are also unemployed in the same quarter one year later.

It is noteworthy, however, that this drop in the number of people remaining unemployed doesn’t go along with a sharp increase in the percentage of people who made the transition from unemployed to employed. That percentage increased only slightly from 31.1% to 33.8% compared to the previous quarter. This means, therefore, that a significant proportion of the unemployed in the third quarter of 2021 have made the transition from unemployment to inactivity and are thus no longer actively seeking work or are not available to start working within the two weeks. This percentage evolved from 26.7% in the previous quarter to 32.8% in the current quarter.

In absolute numbers, it means that of the 342,500 unemployed people in the third quarter of 2021, 114,000 are still unemployed one year later, 116,000 are working and 112,500 have become inactive.

We see large regional differences here: of the Flemish unemployed in the third quarter of 2021, 31.4% are still unemployed one year later, a figure that remained the same compared to a quarter earlier. In the Brussels Capital Region and the Walloon Region, we see higher figures, but they are much lower than a quarter earlier. The percentage of people remaining unemployed over a 1-year period decreases to 38.5% in the Brussels-Capital Region and to 32.3% in the Walloon Region.

Regarding the transition from unemployment to employment, we again see a difference in evolution between the Flemish Region on the one hand and the Walloon Region and the Brussels Capital Region on the other hand. Proportionally, Flemish unemployed people make the transition to employment less frequently than a quarter earlier. This percentage fell from 48.2% to 41.9%, but remains much higher than in the other two Regions. In the Walloon Region, we see a clear increase in the proportion of people making the transition from unemployment to employment: from 15.0% to 26.4%. In Brussels too this percentage goes up from 30.8% to 34.2%. The transition from unemployment to inactivity has increased in each of the three regions.

Inactive

The overwhelming majority of inactive people are still inactive one year later. Of the 3.3 million people who were inactive in the third quarter of 2021, 89.6% or 2.99 million are still inactive one year later. Only 7.3% or 242,000 people have started (again?) working and a small percentage of 3.1% or 105,000 have transitioned to unemployment according to ILO definitions. This means that these people are now seeking work and are also available for a job, whereas they were not a year earlier.

In the Flemish Region and in the Walloon Region, people remain inactive more often than in the Brussels Capital Region, with percentages of respectively 89.7% in the Flemish Region, 91.1% in the Walloon Region and 84.3% in the Brussels Capital Region.

Methodological information

The figures presented here are the results of the Labour Force Survey (LFS), a survey harmonised at European level. The definitions regarding employment and unemployment that are used are those of the International Labour Office (ILO) to allow international comparison. We distinguish three ILO statuses on the labour market: employed, unemployed and inactive. The definitions applied are available here:

https://statbel.fgov.be/en/themes/work-training/labour-market/employment-and-unemployment

Please note that temporarily unemployed persons are temporarily absent from work and are counted as employed.

The Labour Force Survey is a continuous survey, which means that the sample is spread evenly over the 52 weeks of the year. The selected respondents answer a questionnaire mainly related to their activity in the course of a given reference week. The respondents participate four times: they participate for 2 consecutive quarters, then don’t for 2 quarters, and then participate again for 2 quarters. This way, we can observe what the labour market status of a given respondent is in a given quarter, and a quarter and/or a year later: e.g. is someone who is unemployed still unemployed in the next quarter and/or year?

So, if one speaks of a particular status in a particular quarter, it is by definition the status in the reference week. If one indicates to work in the reference week of quarter Q and in the reference week of quarter Q+1, they are counted twice as employed. There are, of course, a number of cases that were unemployed in the meantime, for example, but this is beyond the scope of our data.

The quarterly transitions are the sums of weighted observations of respondents who participated in the successive quarters (e.g. 2019Q4-2020Q1, 2020Q1-2020Q2).

The quarter-specific annual transitions are the sums of weighted observations of respondents participating in the same quarter of two consecutive years (e.g. 2019Q1-2020Q1).

The annual transitions are the means of four quarter-specific annual transitions for two successive years (e.g. 2019-2020).

Respondents who did not participate in one of two waves (= interviews) cannot be taken into account in this analysis. Respondents in the longitudinal sample are in both quarters at least 15 years old and at most 74 years old.

The longitudinal sample is calibrated to the estimated distributions of ILO labour market status per age, gender, region, level of education and nationality in the start and end quarters.

The published figures are based on the Labour Force Survey. They are no exact figures but approximations based on the extrapolation of a random sample from the Belgian population. This must be taken into account when interpreting the results. When the unweighted number of people is lower than 30, data should be interpreted with caution.

Level of education

The level of education is measured using a detailed questionnaire, and the people are then divided into three groups.

Low-skilled people are people who list lower secondary education as their highest level of education. Medium-skilled people  are people who obtained a diploma of higher secondary education but not of higher education. High-skilled people obtained a diploma of higher education.