Age polarization in employment development
Labour markets are characterised by a widespread matching problem in many EU countries, including Finland. As the economy has improved, employment has increased, but not to the same extent as unemployment has declined. This is partly explained by the fact that transitions into employment have come from outside the labour force rather than from registered unemployment.
In our spring forecast, we already highlighted the important but surprisingly underexamined statistical fact that Finnish labour markets are clearly dual in nature. The government’s target of a 72 percent employment rate is expected to be reached during the current year, and the unemployment rate has also fallen clearly below expectations set last spring. However, employment developments show clear polarisation across age groups. According to the latest OECD statistics, similar age-based polarisation is also observed in Sweden. (AI translation)
