Developments in Long-Term Unemployment during Economic Revival: the Case of Estonia

Abstract

The aim of this article is to analyse changes in the nature and scope of long-term unemployment in Estonia against the background of positive economic development in recent years. The analysis covers the period 1997-2006 including changes in the structure of long-term unemployment and an overview of the active labour market policy measures for mitigating long-term unemployment. The analysis is based on the Estonian Labour Force Survey micro data showing that against the background of positive economic growth, in addition to short-term unemployment, also long-term unemployment as well as inactivity has decreased rapidly. However, a problem is still the high share of long-term unemployment among the unemployed – 48%, and the high share of those who have been seeking for work more than two years. A logistic regression indicated that in the greatest risk of long-term unemployment in Estonia are older population, non-Estonians, people with lower educational level and rural unemployed people. The main strategy for curbing long-term unemployment used in Estonia today is the case management method, which enables to approach each unemployed person personally and offer him/her suitable labour market measures for increasing his/her competitiveness.labour market, long-term unemployment, active labour market measures