OECD Area Employment Rate Rose By 1.0 Percentage Point In The 4th Quarter Of 2020, But Remains Below Pre-pandemic Level
The OECD area employment rate – the share of the working-age population with jobs – rose by 1.0 percentage point in the fourth quarter of 2020, to 66.7%, remaining 1.9 percentage points below the rate observed in the first quarter of 2020. In the same period, the OECD labour force participation rate (i.e. the share of people of working-age who are either employed or unemployed) increased by 0.4 percentage point, to 71.7%, still 0.9 percentage point below its level in the first quarter of 2020.
Some care is needed in interpreting the latest developments in the OECD employment rate, as a large part of the increase in the third and, to a lesser extent, fourth quarter of 2020 reflects the return to work of furloughed workers in Canada and the United States, where they are recorded as unemployed, whereas in most other countries, they are recorded as employed. Indeed, the sharp increase in the number of furloughed workers in the second quarter of 2020 made a large contribution to the fall in the employment observed in these two countries.
In the euro area, the employment rate continued to increase, to 67.3% in the fourth quarter of 2020 (from 66.8% in the third quarter). However, it remained 0.7 percentage point below the rate observed in the first quarter of 2020. Compared to the third quarter, the largest increases (of 1.0 percentage point or more) in this area were registered in Estonia (to 74.1%), Luxembourg (to 68.0%), and Portugal (to 69.5%
In the United States, the employment rate continued to increase by 1.5 percentage points, to 67.9%, in the fourth quarter of 2020, then by 0.5 percentage point, to 68.4%, in the first quarter of 2021. This is a slower pace than in the third quarter of 2020, as the number of furloughed workers returning to work diminished. However, in the first quarter of 2021, the employment rate remained 2.9 percentage points below the rate observed in the first quarter of 2020.
In the fourth quarter of 2020, large increases (of 1.4 percentage points or more) were observed in Colombia (to 59.9%), Chile (to 55.5%), Mexico (to 59.1%), Canada (to 72.0%) and Australia (to 73.5%). The employment rate increased marginally in Japan (to 77.3%), while it declined by 0.3 percentage point in the United Kingdom (to 75.0%) and Israel (to 65.8%).
In the fourth quarter of 2020, the youth (aged 15 to 24) employment rate (up by 1.4 percentage points, to 39.6) continued to rise faster than that for the OECD as a whole.
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