Featured statistic: 45.000

Date 2 November 2007

It is estimated that 45,000 people have become unemployed as a result of the reforms of the social security system, so a DNB study on the tightness of the Dutch labour market shows. The downside of the successful policy to raise labour participation is that a number of relatively unemployable older workers and incapacity benefit claimants who have been reassessed have joined the unemployed. The increased unemployment within this category explains in part why supply and demand in the Dutch labour market are not quite in equilibrium in this phase of the business cycle.

In the past, unemployment among older workers (aged 55-64) was lower than that of other age categories because many older workers were leaving the labour market via pre-pension and early retirement schemes. Since the possibilities for early retirement and pre-pension have been curtailed, the labour market participation of older workers has soared over the past few years. At the same time, however, unemployment among older workers has risen to above average. If their unemployment rate had remained the same vis-à-vis the average jobless rate since 2001 (rather than increased), the number of unemployed aged 55-64 in 2006 would have been around 20,000 lower.

Graph Unemployment and participation rate


In addition, since 2005 a large number of incapacity benefit claimants have been reassessed on the basis of stricter criteria. Studies made by the body implementing employee insurances show that the incapacity benefits paid to 41% of the claimants reassessed have been lowered or terminated, and that around half (49%) of these persons still have not found a job after one-and-a-half years. Of the latter, 63% are actively seeking a job. Until February 2007, a total of 194,223 persons had been reassessed. According to a rough estimate, around 25,000 persons whose benefits have been lowered or terminated are currently without work (194,223*0.41*0.49*0.63=24,582).

More information can be found in the article 'Krapte op de arbeidsmarkt' (Tightness in the Labour Market), by DNB staff members Guido Schotten and Marien Ferdinandusse, Economisch Statistische Berichten, 2 November 2007.