Portugal: Less unemployment without more jobs?

A recent study published by the Observatory on the Crisis and Alternatives, entitled Crisis and the labour market: Less unemployment without more jobs? (479 KB PDF, in Portuguese), shows a sharp divergence between the number of unemployed as calculated by the Statistics Portugal (INE) and the number of job applications recorded by the Employment and Vocational Training Institute (IEFP) for 2013; in previous years, the number of unemployed measured by these two sources had been similar.

According to the study, the official unemployment rate provided by the INE underestimates the level of unemployment observed since 2013. Furthermore, the study highlights, based on IEFP data, the unprecedented level of unemployed people engaged in vocational training courses and employment programmes (planos ocupacionais de emprego), who since 2011 have not been counted as unemployed. In 2008, the proportion of people in occupational programmes was around 6% of total unemployment; the figure had risen to 21% in 2013 and 29% in 2014.

If IEFP data on the number of job applications and people in occupational programmes had been included in calculating the unemployment rate, the unemployment level at the end of 2014 would have been between 3 and 6 percentage points higher than officially reported, according to the study, and unemployment would not have shown the downward trend that official figures suggest. That is, the unemployment rate would not have fallen by about 3.3 percentage points between the end of 2012 and the end of 2014 (from 16.8% to 13.5%) but would have increased from 16% to 17%. 

The study also highlights increases in the numbers of discouraged workers (those who have given up looking for work), underemployed people and migrants.

  

 

2011

2012

2013

2014

A

Officially unemployed (INE)

746,200

896,000

808,000

698,300

B

Unemployed in occupational programmes (IEFP)

40,664

82,679

143,853

143,853

C

Discouraged workers (INE)

227,600

273,900

297,500

282,300

D

Migrants (INE)

53,279

134,904

218,050

301,195

E

Underemployed people (INE)

230,200

254,500

259,100

251,700

 By adding migrants and discouraged workers to the active population, the study estimates the following trends in unemployment rate, compared to the official data:

 

 

2011
(%)

2012
(%)

2013
(%)

2014
(%)

A

Official unemployment (INE)

13.9

16.8

15.3

13.5

A+B+C+D

Real unemployment

18.9

24.2

25.3

24.7

A+B+C+D+E

Real unemployment + underemployment

22.9

28.6

29.8

29.1

Note: Data refer to the month of December.

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