Employment Ministry of Employment and the Economy’s forecast: Employment in Finland will improve – the period of unemployment will become longer and shorter

The increase in part-time work partly explains the rapid growth in the number of employed this year.

In Finland employment is improving, says the short-term labor market forecast of the Ministry of Employment and the Economy (TEM). This year, the employment rate is forecast to rise to 73.7 per cent and in 2024 to 74.3 per cent.

The government aims for a 75 percent employment rate by the middle of the decade.

Employment will increase by about 51,000 this year. The growth in part-time work has been very strong and partly explains the rapid growth in the number of employed.

Measured in full-time employment, employment growth has been slower and is only now at roughly pre-pandemic levels. Undersecretary of State at the Ministry of Employment and the Economy Elina Pylkkänen According to the public finance perspective, the growth rate of both part-time and full-time work is important.

“It is important that the employee finds what he or she wants and it is not about reluctant part-time work,” Pylkkänen said at the forecast announcement.

Employment as it rises sharply, the unemployment rate will fall to 6.4 per cent this year. As the rate of employment growth slows, the decline in unemployment will also slow down: the unemployment rate will be six per cent in 2023 and 5.9 per cent in 2024.

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The number of unemployed jobseekers under the age of 25 is projected to fall to historic lows in 2024, lower than at any time since the recession of the 1990s. On the other hand, the number of young people has decreased, although the number is momentarily turning to weak growth.

TEM specialist Erno Mähönen according to, the number of redundant workers is starting to be close to historical normal, meaning that the impact of the corona pandemic is now very small.

Uncertainty about the labor market forecast is created by the possible effects on the labor market of Russia’s war of aggression against Ukraine.

According to the Ministry of Finance’s business cycle forecast, Finland’s gross domestic product will grow by 1.5 per cent this year and 1.7 per cent in 2023. For 2024, growth of 1.5 per cent is forecast again.

For the long-term unemployed the decline in volume appears to be accelerating. According to Mähönen, the amount of long-term unemployment began to decline after last summer.

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“We are now in a situation where it is estimated that the decline in long-term unemployment will accelerate sharply from the summer onwards,” Mähönen said at the announcement.

The number of job vacancies is currently at a record high in open employment.

The main reason for the decline in long-term unemployment is that the periods of unemployment that have started have been short.

“In other words, people who have become unemployed have, on average, been employed very quickly,” said Mähönen.

In addition, there are signs this spring that long periods of unemployment are coming to an end.

“It must also be said that the number of unemployment distributions that have lasted for more than two years is increasing.”

According to Mähönen, this is because so many people were left unemployed at the beginning of the corona crisis.

For the forecast period an increase in the labor force is expected, mainly due to good economic development. The labor force consists of the employed and the unemployed.

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“In other words, when the economy grows, it also pulls the labor force out of the labor market into looking for work,” said a special expert at the Ministry of Employment and the Economy. Minna Ylikännö.

For example, during the corona-related closure measures, some job seekers gave up active job search.

The workforce will grow by about 17,000 this year. By 2023, an increase of about 1,000 people is forecast.

“Growth is particularly focused on those over 55 and those who have retired or are in retirement,” said Ylikännö.

In the long run, population decline will limit the size of the workforce.

According to the Ministry of Employment and the Economy, there is a shortage of labor in Finland, ie employees. In the military sector, for example, it has been difficult to find summer workers and in some companies a shortage of workers is slowing growth.

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