There have been questions about Singapore’s unemployment numbers recently. Here are the facts about unemployment in Singapore:
- In line with international standards, a person is considered ‘unemployed’ if he/she is not working but is actively looking and available for work. The unemployment rate refers to the unemployed as a percentage of the economically active population (i.e. the labour force).
- The overall unemployment rate in Singapore was 2.0% in 2012.
- The overall unemployment rates in other countries are typically higher, ranging from 3.2% for South Korea, 3.3% for Hong Kong, 4.2% for Taiwan, 7.9% for the United Kingdom, 8.1% for the United States to as high as 25.0% for Spain in 2012.
What do “seasonally adjusted” and “non-seasonally adjusted” mean? Why do we use both to report unemployment numbers?
Simply put, non-seasonally adjusted data are the “raw” numbers, while seasonally-adjusted data remove the impact of seasonal influences on the data, such as fresh graduates entering the job market typically in June.
Seasonal patterns exist in unemployment, making it difficult for us to tell if changes in unemployment are true reflections of the economic conditions. To present a more accurate picture, we adopt a technique used by most national statistical agencies to produce seasonally adjusted data that will enable us to observe the underlying trends more clearly.
To learn more about using seasonally adjusted unemployment data, you can view this video
Why is Singapore’s non-seasonally adjusted unemployment rate typically higher in June compared to other periods of the year?
In Singapore, unemployment is typically higher in June, because that’s when fresh graduates enter the labour market and students on holiday look for vacation jobs. This is a seasonal variation that happens every year. So if you directly compare the non-seasonally adjusted unemployment numbers from June with the numbers from another month (such as March) when there isn’t such a big influx of job seekers, it would look like a big increase in unemployment!
Later in the year, unemployment typically falls as graduates find work and students return to school. This seasonal pattern makes it difficult for us to tell if a rise or fall in unemployment is a true reflection of the underlying trend or merely due to seasonal influences. To compare unemployment between different periods in the same year, we should look at the seasonally-adjusted data which remove the impact of seasonal influences.
What do we mean by employment growth? With high employment growth, would unemployment decrease?
Employment growth refers to the additional number of persons who are in employment, derived by taking the difference in the employment level at the end of the reference period compared with the end of the preceding period. To put it simply, it is not gross job creation, but the increase in the number of people who are employed which, conceptually, is the difference between people entering and exiting employment.
While employment growth measures the additional number of persons in employment, unemployment measures the number of persons who are not in employment but are actively seeking and available for jobs. Unemployment can vary due to changes in demand or supply of manpower. Hence, high employment growth may not necessarily translate to lower unemployment.
Unemployment can decline if more people succeed in finding jobs or if unemployed persons stop looking for a job and leave the labour force either temporarily (e.g. to take up training) or permanently (e.g. to retire). Conversely, unemployment may rise due to an increase in jobseekers (e.g. laid off workers, fresh graduates or re-entrants to the labour market) or if more people quit their jobs to look for alternative employment.
Want to find out more about our manpower statistics? MOM publishes them on http://stats.mom.gov.sg, including breakdowns and latest numbers. You can also learn more about various manpower indicators, their uses, definitions and common misconceptions at the website, or you can check out MOM’s YouTube channel.
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