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Why the drop in unemployment in the second quarter is not really a

According to the Insee, the unemployment rate fell by 0.7 point in the second quarter to 7.1%. This artificial decline in is in reality the consequence of the c

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Why the drop in unemployment in the second quarter is not really a

According to the Insee, the unemployment rate fell by 0.7 point in the second quarter to 7.1%. This artificial decline in is in reality the consequence of the confinement.

A decline in trompe l'oeil. The unemployment rate in France fell by 0.7 point in the second quarter, to 7.1%, according to Insee. In detail, the rate of unemployment decreases significantly for the 25-49 years (0.8 of a percentage point) and the 50 years and above (1.0 point), but it increases sharply for those aged under 25 years (+1.8 point).

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But these figures are flattering, are misleading and tell us badly on the economic situation of the country. They are in fact due to the confinement, which has prevented a lot of unemployed people to look for one. This decline "does not translate to an improvement in the labour market, but a significant effect of confinement of people without employment, which outweighs the effect of increase in the number of unemployed people", explains Insee.

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restrictive Definition of "unemployed person"

To understand this decline, we must return to the definition of the unemployed person, within the meaning of the international labour Office. According to the ILO, it is a person aged 15 years or older who meets the following three criteria : without a job during the reference week ; is available to work in the next two weeks has made over the last four weeks actively looking for employment or found a job that starts in three months.

The rate of unemployment in the ILO sense, decline during the second quarter.

Insee

During the containment, many unemployed people have given up looking actively for a job. They have thus lost the status of "unemployed person" and contributed to an artificial decline in the unemployment rate in France. Already in the first quarter, the unemployment rate declined 0.3 percentage point, to 7.8%.

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a Sign of the economic downturn, the "halo" around unemployment" has increased significantly during the containment, mirroring the decline in unemployment," said Insee. This "halo" refers to persons without employment who wish to a but which do not meet the other criteria of the ILO to be considered as unemployed. Their number jumped to 767 000 compared to a first quarter of 2020 already in net rise (+44 000).

Rise of the "halo" of unemployment

The table is, therefore, sobering. The observation of the decrease in unemployment, but the increase of its "halo" draws an economy suffering. "Because of the sharp drop in employment, the increase of the halo more than offset the decline in the unemployment rate. Thus, the share of persons aged 15-64 years, unemployed and seeking work (unemployed and in his halo) increased by 1.2 points in the second quarter of 2020 and reached its highest level since 2016," concludes Insee.

The "halo" around unemployment" has increased substantially

Insee

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Unemployment : Elizabeth Terminal refers to the objective of full employment in 2025 unemployment (category A) decrease of 4.6% in June, but remains at a very high level of unemployment Insurance : the return to the previous rules will not be retroactive

Finally, other figures highlight the deterioration of the economic situation. The employment rate of 15-64 years decreased by 1.6 percentage points to 64.4 per cent and reached its lowest level since the beginning of 2017. Finally, the underemployment, which mainly concerns part-time workers who wish to work more - has surged, reaching 20% of people in employment in the second quarter. But this increase must be seen in context : it is the consequence of the massive recourse to partial unemployment by the companies during the confinement.

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