The unemployment rate in Cyprus reached 5.4% of the labour force in the fourth quarter of 2010, according to the latest Labour Force Survey, down from 6.0% in the same quarter of 2009.
Unemployment also fell in absolute numbers, to 21,899 from 24,273 in the same period of the previous year.
The unemployment rate in the fourth quarter was higher among women (5.7%) than men (5.1%) and a much higher 14.5% for all those under 25.
The total labour force was reported at 408,490, compared with 407,542 in the fourth quarter of 2009, while the total number employed rose to 386,591 from 383,268.
For the whole 2010 the unemployment rate was 6.2%, up from 5.3% in 2009.
While the overall rate has fallen, long-term unemployment has more than doubled.
Just over a quarter (26.1%) of the unemployed in the fourth quarter of 2010 had been out of work for more than one year, compared with 12.3% in the fourth quarter of 2009.
The long-term unemployed are far more difficult to reintegrate into work than the short-term unemployed.
Why does Eurostat say 7.2%?
There are many ways to measure unemployment. This Labour Force Survey is carried out in accordance with a European Union Regulation, therefore one should assume that it is compatible with other EU sources.
Yet in its monthly series, the EU’s statistical service, Eurostat, reported a much higher seasonally adjusted unemployment rate of 7.4% in January.
The Eurostat average for the fourth quarter was 7.2%, compared with 5.4% according to the LFS.
Officials at the Cyprus Statistical Service explain that the main reason for the difference is methodology.
First, the monthly number is seasonally adjusted, whereas the unemployment rate in the Labour Force Survey fluctuates, for example, according to the seasons for tourism or construction.
Second, the monthly figure is produced with inputs from the registered unemployment rate, and not just the Labour Force Survey, which attempts to measure all those actively seeking work.
Last but not least, unlike Eurostat’s Labour Force figure, which is taken from the Cyprus Statistical Service and is therefore compatible with the Cyprus figures, Eurostat calculates the monthly figure by itself.
It is also a projection, which might be revised as new data come in.
In the Eurostat press release that accompanies the publication of the monthly unemployment rates Eurostat indirectly admits that its monthly figure is less robust than the LFS.
“These results are interpolated/extrapolated to monthly data using national survey data and/or national monthly series on registered unemployment,” it says.
“The most recent figures are therefore provisional.”
Fiona Mullen
Director, Sapienta Economics Ltd
