People’s willingness to work has reached record-highs. Rapidly rising prices motivate people to look for additional income. The participation rate, i.e., the share of people who are either employed or are actively looking for a job, rose to 75.4% of the working-age population in the second quarter.
The number of job seekers increased especially among young people. Since it is harder for young people to find work, unemployment in this age group is three times higher than the country’s average.
The downturn in the economy and the increase in the number of jobseekers have lifted the number of the unemployed. In the second quarter, the unemployment rate reached 7.6%, slightly down from 7.8% in the first quarter.
The number of the employed also set a record. Employment rose in the second quarter due to the increase in the number of entrepreneurs. The number of wage-earners did not change significantly – it increased in the public sector but decreased in the private sector, especially in industry, construction, and transport.
In the second half of this year, we expect the economy to start growing again. The recovery will be gradual, however. Estonia’s main export markets are not doing very well currently. Domestic demand is being held back by low sentiment, high prices and future tax increases. Unemployment will decrease next year, but only slightly. In the private sector, demand for labour is rather modest. The government’s austerity policy limits employment and wage growth in the public sector.
