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Comparison between the employment statistics of Statistics Finland and the Ministry of Employment and the Economy

Statistics Finland's unemployment figures are based on the sample-based Labour Force Survey. The figures of the Ministry of Employment and the Economy are in turn based on the Employment Ser-vice Statistics made on the basis of the Employment and Economic Development Offices' customer registers. The figures of Statistics Finland's Labour Force Survey and of the Ministry of Employment and the Economy have always deviated from each other. Between 2006 and 2011, the Labour Force Survey indicates that the number of unemployed has been on the annual level 31,000 to 44,000 lower than according to the Employment Service Statistics. Starting from 2012, the difference in the num-ber of unemployed persons has grown, being 94,000 in 2014 (Figure). The main reason for the differ-ence in unemployment figures is the differing definition of unemployed in the two statistics. In addi-tion, the difference has grown due to the discontinuation of unemployment pension and legislative amendments have an effect on the definition of unemployed job seekers in the Employment Service Statistics.

Unemployed persons in the statistics of Statistics Finland and the Ministry of Employment and the Economy in 1997 to 2014, annual averages

Statistics Finland's Labour Force Survey describes the demand and supply of labour in the economy – the measurement of unemployment is just one of the Survey's tasks. The Labour Force Survey is based on a sample drawn from the population between the ages of 15 and 74. In the Labour Force Survey, the definitions for an employed and unemployed person comply with the recommendations of the ILO, the International Labour Organisation of the UN, and the regulations of the European Union. The figures are internationally comparable.

The Ministry of Employment and the Economy's Employment Service Statistics describe persons having taken part in various employment and economic administration services. The data are used in monitoring the activity of employment and economic administration and in developing services needed by various customer groups. The figures on unemployment based on the Employment Service Statistics cannot be internationally compared because the labour force administrations and legislations on unemployment benefits vary by country.

Other EU Member States also publish corresponding internationally comparable unemployment figures as those published in Statistics Finland's Labour Force Survey. Many countries also produce national unemployment figures based on administrative data sources, in which the difference to the Labour Force Survey figures is often great.

In Statistics Finland's Labour Force Survey, a person is unemployed if he/she is without work during the survey week, that is, has not done paid work or has not worked as self-employed, has sought work as an employee or self-employed in the past four weeks and could start work within two weeks. A person who is without work and waiting for an agreed job to start within three months is also classified as unemployed if he/she could start work within two weeks. Students or those in labour market training, who fulfil the above-mentioned criteria for unemployed, are unemployed persons. Similarly, persons laid off for the time being or for a fixed period of over three months are unemployed if they fulfil the above-mentioned criteria for unemployed persons. Those having worked even a little during the survey week are, however, always employed persons in the Labour Force Survey.

In the Ministry of Employment and the Economy's Employment Service Statistics, unemployed persons are those registered as job seekers at the Employment and Economic Development Offices who do not have an employment relationship or do not work full-time as an entrepreneur or a self-employed worker. Persons with an employment relationship are considered unemployed if they are fully laid off or their regular weekly working time is under four hours. The Employment Service Statistics do not classify as unemployed those in services promoting employment, the recipients of unemployment pension or full-time school children and students, not even during school holidays. At the beginning of 2013, the requirements relating to age, working capacity and availability on the labour market were removed from the definition of an unemployed job seeker. From the start of July 2013, fully group laid-off persons are also included in unemployed persons in the Employment Service Statistics.

The biggest reason for the difference in the numbers of unemployed in the statistics is that the internationally comparable criteria for unemployed used by Statistics Finland are stricter than those used by the Ministry of Employment and the Economy's Employment Service Statistics. In Statistics Finland's Labour Force Survey, unemployed are expected to be both active in seeking work (e.g. reading job advertisements) and able to accept work within a short time. The difference is also due to that in the Employment Service Statistics, a larger share of fully laid off is visible as unemployed than in the Labour Force Survey.

Statistics Finland's Labour Force Survey also describes so-called disguised unemployment beside unemployment. Persons outside the labour force who would want gainful work and could start work within a fortnight, but who have not looked for work in the past four weeks are in disguised unemployment. In 2014, the number of those defined as persons in disguised unemployment was 138,000, on average. From 2011, the number grew by 35,000 persons. In recent years, the most common reason for disguised unemployment has been the belief that work is not available. Other reasons include studying, child care or health issues. However, those in disguised unemployment do not alone explain the difference in the number of unemployed persons in the statistics. First, not all persons in disguised unemployment defined in this way are unemployed job seekers at Employment and Economic Development Offices. Second, it is also required of those in disguised unemployment that they want to work and could start work quite soon.

The difference between the numbers of unemployed persons in the statistics was at its smallest in years when the employment situation was good (Figure above). The growing difference in recent years is related to a prolonged poor employment situation, when the definitional differences of the statistics described above gain more emphasis and for example, disguised unemployment increased. Simultaneous legislative amendments also increased the number of unemployed in the Employment Service Statistics. For example, the gradual discontinuation of unemployment pension is visible in the Ministry of Employment and the Economy's statistics. In 2012 to 2014, unemployed for the Ministry of Employment and the Economy included around 14,000 to 17,000 such long-term unemployed aged 60 or over (those on additional days of unemployment allowance), who could previously have started unemployment pension. It is estimated that the removal of the requirements relating to age, working capacity and availability on the labour market from the Employment Service Statistics at the beginning of 2013 increased the number of unemployed by at most a few thousand. The inclusion of group laid-off persons in unemployed in the Employment Service Statistics from July 2013 enlarged the number of unemployed job seekers by around 4,000 to 10,000, depending on the month. In total, these changes increased the number of unemployed in the Employment Service Statistics by around 24,000 to 30,000 in 2014.

In contrast, the number of unemployed persons in the Employment Service Statistics decreased due to the change in the unemployment benefit legislation at the beginning of 2014 that encouraged those receiving unemployment benefit to accept part-time work. Their earned income can be EUR 300 per month without reducing their unemployment allowance. Higher income and unemployment allowance are reconciled. However, such benefit recipients are not unemployed in the Employment Service Statistics if the weekly working time is four hours or more.

On the annual level, the unemployment figures of the Ministry of Employment and the Economy have been larger than those of Statistics Finland's Labour Force Survey. On account of students seeking entry on the labour market, the number of unemployed in spring has usually been higher in the Labour Force Survey than that in the Employment Service Statistics because students seeking work are not entered as unemployed job seekers in the Employment Service Statistics. The share of students in the number of the unemployed in the Labour Force Survey for May 2014 was 48 per cent.

In addition to the unemployment figures of the Labour Force Survey, Statistics Finland publishes unemployment data based on the Ministry of Employment and the Economy's Employment Service Statistics in the register-based employment statistics as part of the description of the main type of activity of the whole population. The data describe the situation on the last week of the year but the statistics also include accumulated data on the months of employment and unemployment in the year. Preliminary data of the statistics are complete around 12 months and final data around 16 months from the statistical reference period.

Links to the quality descriptions:

Statistics Finland's Labour Force Survey

Employment Service Statistics of the Ministry of Employment and the Economy

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Last updated 13.5.2015