KILM 19 Labour Market Flows - KILM 3rd Edition

Departments and Offices

THE 20 INDICATORS

KEY INDICATORS OF
THE LABOUR MARKET

Indicator index | Front page
Previous | Next

KILM 19. Labour market flows

Introduction

Statistics on labour market flows describe the labour market experience of individuals over the reference period, that is, the number of persons who have changed jobs or have moved into and out of employment, and into and out of being unemployed or outside the labour market, rather than just changes in the number of persons in these situations and in the labour force characteristics of groups. In this way, the statistics can give insight into how labour market developments affect different groups of individuals over the course of time.

In any given year, as many as one-fourth of all persons in the working-age population may undergo a change in labour force status. People lose or leave their jobs, or enter or depart from the labour market. In this chapter, the statistics selected describe the flows into and out of wage and salaried employment, and into and out of unemployment, with special emphasis on the moves between wage and salaried employment and unemployment (and vice versa).

All flows reported in the table represent a large number of individual transitions. The situation at a point of time (t) is compared with the situation one year previously (t–1) and related to the total number of persons in wage and salaried employment. A conclusion drawn from a review of differences over time in static information (i.e. the unemployment rate) may not only be influenced but also possibly reversed when it is possible to look at the moves that have resulted in these differences. Statistics are presented in table 19 for 14 European countries and for Canada, covering various years.^[1]

Trends

Figure 19a. Flows from unemployment to employment as a percentage of total employment inflows, 2001
fig19a

fig19a

Those who had been unemployed had the highest share of the flow into wage and salaried employment (at least 40 per cent) in France, Greece, Italy, Portugal and Spain. In the same year for Belgium, Canada (2000), Finland and Luxembourg, the share was between 20 and 30 per cent, while in Denmark, Germany and the United Kingdom it was much lower at between 12 and 17 per cent. In other words, in this last group, less than a fifth of all flows into wage and salaried employment were from among unemployed persons, in contrast to approximately two-thirds in Spain.

Figure 19b. (Re)integration rates, selected economies, 1995-2001
fig19b

fig19b

A high or low number of transitions from unemployment into wage and salaried employment does not of itself indicate a high or low efficiency of the labour market. The (re)integration rate, however, can serve as an indication of the capability of the labour market (here, wage and salaried employment) to absorb unemployed persons rather than “produce” them. By 2001, only Belgium and Germany showed a negative balance, indicating that more persons were leaving wage and salaried employment to become unemployed than were able to be (re)integrated. Spain and Italy were the best performers throughout the entire period, with a surplus of transitions on average of 4.6 and 3.4 percentage points respectively. Most economies have shown improvements in their ability to reintegrate the labour force into wage and salaried employment during the 1990s. Up to 1995, the majority of economies had negative rates.

^[1] In 1999 the ILO commissioned a study of statistical activities relating to the collection of labour market flow data with the aim of eventually including labour market dynamic indicators in the KILM project. (See P. Stibbard: Labour market dynamics: A global survey of statistical activities, ILO Employment Paper 1999/38 (Geneva, 1999), website: http://www.ilo.org/public/english/employment/strat/publ/etp38.htm.). The study concluded that about 30-40 countries, possibly fewer, would be in a position to supply flow data of any type. Why then, users may wonder, are only 15 countries presented here? Other countries were approached with the aim of supplementing the current data set, but either they were unable to provide the necessary information or the information available was not sufficiently timely or sufficiently comparable. We will continue to investigate other data sets in the hope of expanding coverage of table 19 in the future.