A new method to measure structural unemployment via labour market flows

According to a new structural unemployment indicator based on labour market flows developed by the Bank of Finland, unemployment is currently close to the structural level in Finland and cannot therefore be expected to decline very rapidly in the immediate years ahead. After the financial crisis, structural unemployment grew almost without a pause until very recently, since the flow out of unemployment dried up. This reflects the fact that, during the recession following the financial crisis, people who have lost their jobs have experienced difficulties in finding a new job, possibly because new jobs may have been created in sectors and/or geographical locations other than those where they disappeared. However, with the upturn in economic growth the probability of finding a job has begun to improve, which will with time also reduce structural unemployment.