The OECD area employment rate, which is the percentage share of the working-age population with jobs, rose to 68.0% in the third quarter of 2021, from 67.4% in the second quarter. The rise in the OECD area employment rate occurred alongside an increase in the labour force participation rate – the share of the working-age population that is either employed or unemployed – to 72.5%, up from 72.2% in the second quarter.
The OECD area employment rate rose at broadly the same pace for women (to 60.8%, from 60.2% in the second quarter) and men (to 75.3%, from 74.7%), as well as among young people aged 15-24 (to 41.6%, from 40.9%), people aged 25-54 (to 77.9%, from 77.3%) and those aged 55-64 (to 61.7%, from 61.1%).
Increases in the employment rate were reported in 35 out of 37 OECD countries for which data is available, with a decrease registered in Australia (down to 74.8%, from 75.4% in the second quarter) and a stable employment rate in Finland (72.7% in both the second and third quarter).
The employment rate rose by 0.7 percentage point, to 68.4%, in the euro area as a whole. It increased by 1.4 percentage points in Canada (to 73.8 %), by 0.8 percentage point in the United States (to 69.8 %, still 1.9 percentage points below the pre-pandemic rate), by 0.4 percentage point in Korea (to 66.8 %) and Mexico (to 61.5 %), by 0.3 percentage point in the United Kingdom (to 75.4%), and by 0.2 percentage point in Japan (to 77.9 %). More recent data for the fourth quarter of 2021 show that employment rates increased further in the United States (to 70.5 %) and Canada (to 74.8 %).
In the third quarter, the largest increases in the employment rate were recorded in Chile (to 59.2 %, from 57.3 %), Colombia (to 61.5 %, from 59.6 %), Costa Rica (to 58.3 %, from 55.6 %) and Ireland (to 71.1 %, from 69.1 %). However, Chile, Colombia and Costa Rica are also the countries for which the gap to pre-pandemic rates (recorded in the fourth quarter of 2019) is the highest.
In the third quarter, employment rates were above pre-pandemic levels in Australia, France, Greece, Hungary, New Zealand and Portugal.
(1) Break in time series for the euro area between Q4 2020 and Q1 2021 resulting from changes in the EU Labour Force Survey. This break also affects, to some extent, aggregates for the OECD-Total.
A large part of the increase in the employment rate for the OECD-Total in the third quarter of 2020 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.
Visit the interactive OECD Data Portal to explore these data further.
Table 4: OECD labour force participation rates (15-64)
Labour force as a percentage of corresponding working age population, seasonally adjusted
((1) This chart provides a more comparable view of movements in US employment statistics with movements in most other OECD countries, where furloughed workers are included in official employment statistics. It should however not be interpreted as alternative official statistics for the United States.
In this chart, the number of employed covers age group from 16 to 64, while the number of unemployed on temporary lay-off covers age group 16 and over.
(2) US Current Population Survey data.
Note: Employment and unemployment statistics during the COVID-19 crisis
The broad comparability of unemployment data across OECD countries is achieved through the adherence of national statistics to International Guidelines from the International Conference of Labour Statisticians (ICLS) – the so-called ILO guidelines.
Departures from these guidelines may however exist across countries depending on national circumstances (e.g. statistical environment, national regulations and practices). Typically, these departures have only a limited impact on broad comparability of employment and unemployment statistics. However, the unprecedented impact of COVID-19 is amplifying divergences and affects the cross-country comparability of unemployment statistics in this news release.
This concerns in particular the treatment of persons on temporary layoff or employees furloughed by their employers. These are persons not at work during the survey reference week due to economic reasons and business conditions (i.e. lack of work, shortage of demand for goods and services, business closures or business moves).
According to ILO guidelines, ‘employed’ persons include those who, in their present job, were ‘not at work’ for a short duration but maintained a job attachment during their absence (ILO, 2013 and 2020). Job attachment is determined on the basis of the continued receipt of remuneration, and/or the total duration of the absence. In practice, formal or continued job attachment is established when:
- the expected total duration of the absence is up to three months (which can be more than three months, if the return to employment in the same economic unit is guaranteed and, in the case of the pandemic, once the restrictions in place – where applicable – are lifted)
- workers continue to receive remuneration from their employer, including partial pay, even if they also receive support from other sources, including government schemes.
In turn persons are classified as ‘not employed’ if:
- The expected total duration of absence is greater than three months or there is no or unknown expected return to the same economic unit
- People in this condition do not receive any part of their remuneration from their employer.
Not-employed persons are classified as ‘unemployed’ if they fulfil the criteria of active “job search” and “availability” specified for the measurement of unemployment.
However, departures from these guidelines in national practices do exist. In particular, in North America persons on temporary layoff are considered to be “only weakly or not at all attached to their job and are to be counted as unemployed” (Sorrentino, 2000). In the United States, people on temporary layoff are classified as ‘unemployed’ if they expect to be recalled to their job within six months. If they have not been given a date to return to work by their employer and if they have no expectation to return to work within six months, they need to fulfil the “job search” criteria to be classified as ‘unemployed’. For the latest US figures “people who were effectively laid off due to pandemic-related closures were counted among the unemployed on temporary layoff” without further testing for their return to their previous job (BLS, 2020). In Canada, persons in temporary layoff are also classified as ‘unemployed’ if they have a date of return or an indication that they will be recalled by their employers.
Conversely, persons on temporary layoff are classified as employed (not at work) in Europe, as recommended by the ILO Guidelines (Eurostat, 2016). In practice, formal job attachment is tested on the basis of (i) an assurance of return to work within a period of three months or (ii) the receipt of half or more of their wage or salary from their employer. Somewhat stricter than ILO guidance, absences during COVID-19 crisis whose duration is unknown are treated as absences longer than three months. Those failing to satisfy these two criteria are classified as unemployed if they are “available to start work” (over the next two weeks) and have actively searched for a job in the last four weeks. All other persons on layoff are classified as inactive.
 Broad comparability is ensured during normal business conditions, while divergences are potentially exacerbated during economic and financial crisis, such as the Great Recession or the current Covid-19 crisis.
 Some not-employed persons may be classified as “inactive/out of the labour force” because, due to the pandemic, they are either not able to actively look for a job even if they are available to work or are not available to work because of family responsibilities as schools and care services are closed.