This theme report describes the development on the labour market in 2020 with a focus on employment and unemployment. Unless otherwise stated, this report is based on seasonally adjusted and smoothed data.

Sharp drop in employment during COVID-19 pandemic

Employment dropped sharply as a result of the COVID-19 pandemic and the lowest employment rate during the year, 66.4 percent, was noted in June. This was 2.0 percentage points less than in February 2020. In the second half of the year, some recovery was noted in employment although not back to the same level as before the pandemic. In December, the employment rate was 67.4 percent, which is 1.0 percentage points less than in February. The employment gap between men and women widened somewhat during the year as a result of a larger drop among women.

For comparison, the lowest employment rate during the financial crisis, which began in 2008, was 64.1 percent, which is 2.3 percentage points lower than the lowest level in 2020. However, the rate of change in employment was faster in 2020, as it decreased more per month. On the other hand, signs of recovery were noted more quickly and employment began to rise again after a few months, while the downturn was more long-lasting during the financial crisis.

Employment fell most among young people and foreign born persons

In 2020, employment fell most among young people aged 15-24 years. Between February and June, the number of employed young people decreased by 13.8 percent. A decrease was also noted in the age group 25-34 years, in which the number of employed persons decreased by 6.2 percent in the same period. In the second half of the year, the number of employed people rebounded to some extent in both age groups, but remained at a lower level than before the effect of the COVID-19 pandemic on the Swedish labour market. In other age groups, minor changes were noted.

In 2020, employment decreased more among foreign born persons than among Swedish born persons, which led to a larger difference in employment between these groups. The difference was largest in the second quarter, when the proportion of employed persons was 69.3 percent among Swedish born persons and 58.7 percent among foreign born persons. Compared with the first quarter, the rates decreased by 0.9 percentage points among Swedish born persons and by 2.1 percentage points among foreign born persons. The employment rate recovered somewhat for both groups by the end of the year, but remained at a lower level than before the pandemic.

Decrease among temporary employees most apparent

The number of temporary employees decreased sharply in spring 2020 and was at its lowest in June. The number of temporary employees was 12.0 percent lower than in February. In the second half of the year, the number of temporary employees rebounded somewhat, although remained considerably lower than before the pandemic by the end of the year.

The number of permanent employees was affected by the COVID-19 pandemic to a smaller extent, and in December, the levels were similar to February. The number of self-employed persons and assisting household members decreased consistently during the year and was 4.2 percent lower in December than in February.

Absence peaked in April

The proportion of employed persons who were absent during the whole week increased during the spring, but subsequently recovered gradually. The proportion of absence was highest in April, at 19.2 percent, which is 4.2 percentage points higher than in February. More people than normal were absent due to lay-offs and lack of work in 2020. In April, 68 000 people stated lay-offs and 52 000 people stated lack of work as the main reason for absence during the whole week, based on non-seasonally adjusted data.

Persons who are absent due to lack of work or lay-offs are often absent for only part of the week. There were 144 000 people who were absent during part of the week due to lay-offs. There were 85 000 people who stated lack of work as the main reason for absence.

Hours worked decreased by one tenth from February to April

The number of hours worked decreased sharply due to the COVID-19 pandemic. The lowest number of hours worked was noted in April, at 139.6 million per week, which is 10.8 percent lower than in February. The last time the number of hours worked was this low was during the financial crisis. As different from the financial crisis, during the 2020 pandemic the number of hours worked fell more rapidly and signs of recovery were also noted more quickly.

In percentage terms, the number of hours worked decreased more than the number of employed persons in 2020. This indicates a resilience in the employment rate and that instead, absence increased for a time. The large number of employed persons who were laid off is a contributing factor to the development.

Industries in the service sector were hard hit

The industries that were hit hardest by the COVID-19 pandemic was hotels and restaurants and transport. The lowest number of employed persons in hotels and restaurants was noted in April. In transport, the number of employed persons was lowest in June. The decrease compared with February was 20.8 percent and 13.5 percent respectively.

The industries that were hit especially hard in 2020 have in common that they are both in the service sector. One explanation for this is that they were particularly affected by the restrictions and recommendations in the wake of the pandemic.

Rapid increase in unemployment in the first six months

The unemployment rate increased rapidly in the first six months of 2020. The highest percentage, 9.2 percent, was noted in June, and was 2.0 percentage points higher than in February. For comparison, the highest unemployment rate during the financial crisis was 8.9 percent. Towards the later part of 2020, some recovery was noted. The unemployment rate was 8.6 percent in December, up by 1.3 percentage points compared with February.

Unemployment increased sharply among young people aged 15-24 years in the first six months of 2020. The increase occurred mostly in April and in June. In June, the percentage of unemployed young people was 27.7 percent, 7.2 percentage points higher than in February.

Unemployment rose among both foreign born persons and Swedish born persons in 2020. The highest rates were noted in the third quarter, 5.5 percent among Swedish born persons and 20.3 percent among foreign born persons. This was an increase of 1.1 percentage points and 3.7 percentage points, respectively, compared with the first quarter.

More latent job seekers

The percentage of persons outside the labour force increased sharply in the first months of the COVID-19 pandemic, only to promptly rebound. During the financial crisis, the downturn was considerably more persistent. This indicates, in 2020, continued confidence in the labour market, in which people continue to seek work despite a high level of unemployment.

Latent job seekers was a subgroup among persons outside the labour force that was affected by the pandemic. The number of latent jobs seekers was higher throughout 2020 compared with 2019. The difference was largest in the second quarter, at 59.0 percent more than in the same quarter in the previous year, according to non-seasonally adjusted data.

Higher risk of unemployment and poorer chance of work

The LFS flow statistics are used to describe transitions between different conditions in the labour market (e.g. different labour force statuses). Compared with the previous five years, the statistics show that the risk of unemployment was higher in 2020. The risk of unemployment for employed persons was largest in the second quarter, when it was 2.0 percent. The risk was twice as high compared with the average of the same period in 2015-2019. In the second half of the year, the risk of unemployment was lower than in the second quarter, but remained somewhat higher than in the previous year.

At the same time, the chance of employment was lower compared with the previous years. The most apparent difference was noted in the second quarter, when the chance of employment for unemployed persons was 24.4 percent. This was 6.2 percentage points less than the average for the previous five years, when the chance varied between 29 and 32 percent. In the third and fourth quarters, the chance of finding work increased. This indicates that it was not just a matter of a smaller number of unemployed persons in the later part of 2020, but also that more people found work.

A more detailed presentation can be found in the report:

Labour Force Surveys (LFS) – Theme: The labour market during the COVID-19 pandemic (pdf)