Large worker flows in the Finnish economy

Abstract

Viewed in the light of Finland’s employment and unemployment figures, the labour market impact of the weak economic performance of recent years would appear so far to be less than feared. These aggregate-level figures do not, however, reveal anything about changes between sectors or worker flows. The present article explores the labour market’s internal dynamics and worker flows. Our aim is to take an overview of the dynamics of the Finnish labour market that lie behind the typically reported aggregate figures. We also use worker flows to explain observed changes in unemployment. In addition to this, the article presents the results achieved when probit analysis is used to study labour market flows. The analysis presented here is based primarily on micro-level quarterly data from Statistics Finland’s Labour Force Survey for the years 2001–2013 (covering 15–74-year-olds). This, in turn, is based on monthly data from questionnaires. The material comprises one and a half million observations and contains data on e.g. respondents’ age, gender, educational background, sector of employment, labour force participation, labour market state, professional status, duration of unemployment and duration of current job.