Overview

23.11.2020

The employment rate in the OECD countries, i.e. the share of the working-age population with jobs decreased by 4.0 percentage points to 64.6% in Q2 2020. During this period, the number of employed people was 560 mln., which is 34 mln. less than in the previous quarter.

The employment rate in Canada and the United States fell by 8.5 (to 64.7%) and 8.9 percentage points (to 62.5%), respectively, in the second quarter. Since many previously laid-off workers are now returning to work, data for Q3 2020 shows growth - in Canada (by 5.7 to 70.4%) and in the United States (by 3.8 to 66.3%), but still remain 2.8 and 5.1 percentage points below the level of Q1 2020.

In the Euro Area, employment declined by 1.9 percentage points to 66.2% in Q2 2020, with decline by 3.0 percentage points or more in Estonia, Ireland and Spain. Among other countries, the index fell: 1.0 percentage point in Japan (to 77.0%), 0.2 percentage point in the United Kingdom (to 75.4%), and more than 3.0 percentage points in Australia, Chile, Colombia, Iceland and Turkey.

It is noteworthy that the level of employment has decreased for all population groups. Among men and women - by about 4.0 percentage points (to 72.0% and 57.3%, respectively). Among young people, the indicator fell more markedly (by 5.6 percentage points, to 36.3%) than among people aged 25-54 (a decrease of 4.0 percentage points to 74.7%) and for people aged 55-64 (a decrease of 2.8 percentage points to 59.3%).

The overall comparability of unemployment data in OECD countries is ensured by bringing national statistics in line with the International Guidelines of the International Conference of Labour Statisticians (ICLS), the so-called ILO guidelines.


However, there may be deviations from these guidelines in different countries depending on national circumstances (i.e. statistical environment, national rules and practices). As a rule, these deviations have only a limited impact on the overall comparability of employment and unemployment statistics. However, the unprecedented impact of the COVID-19 coronavirus infection increases discrepancies and affects the cross-country comparability of unemployment statistics.

In particular, this applies to the treatment of temporary laid-off persons or dismissed by their employers. These are people who did not work during the base week of the study for economic reasons and due to commercial conditions (i.e., lack of work, lack of demand for goods and services, closure of businesses or relocation of businesses).

According to the ILO guidelines, employees are those persons who have not worked in their current job for a short period of time but have retained their jobs during their absence (ILO, 2013 and 2020).

The work experience is determined on the basis of continuous receipt of remuneration and/or the total length of absence. In practice, formal or permanent employment is established when:
-    expected total duration of absence is up to three months (which may exceed three months if a return to work in the same economic unit is guaranteed, and in case of a pandemic, after the current restrictions are lifted, where applicable)
-    employees continue to receive remuneration from their employer, including partial wages, even if they also receive support from other sources, including government.

In turn, individuals are classified as "not employed" if:
-    expected total duration of absence exceeds three months or no return to the same economic unit is expected
-    persons in this position do not receive any part of their remuneration from the employer.

Unemployed persons are classified as "unemployed" if they meet the criteria for active "job search" and "availability" set for measuring unemployment.

However, these guidelines are not followed in national practice.

In particular, in North America, people who are temporarily laid-off are considered "only loosely connected or not at all connected to their work and are considered unemployed" (Sorrentino, 2000). In the US, people who are temporarily laid-off are classified as "unemployed" if they expect to be returned to work within six months. If the employer has not given them a date to return to work and if they do not expect to return to work within six months, they must meet the "job search" criteria to be classified as "unemployed". According to the latest data of the United States, "people who actually were dismissed because of plant closures in a pandemic" was included in the number of unemployed, temporary laid-off without further testing for return to previous jobs (BLS, 2020). In Canada, people who are temporarily laid-off are also classified as "unemployed" if they have a return date or an indication that they will be recalled by their employers.

Conversely, persons who are temporarily laid-off are classified in Europe as employed (non working) in accordance with the recommendations of the ILO Guidelines (Eurostat, 2016). In practice, the official employment link is verified on the basis of (i) a guarantee to return to work within three months, or (ii) receiving half or more of their salary from the employer. Somewhat stricter than the ILO guidelines, absence from work during the COVID-19 crisis, the duration of which is unknown, is considered as absence from work for more than three months. People who do not meet these two criteria are classified as unemployed if they are "ready to start work" (within the next two weeks) and have been actively looking for work in the past four weeks. All other persons who are dismissed are classified as inactive.





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