Ruqayyah Snyder
Unemployment in Austria has been a growing concern, especially with the impact of the Covid-19 pandemic, which caused a spike in unemployment across Europe. The Austrian government has introduced various policies to tackle this issue and achieve full employment. With an unemployment rate of 5.24% in 2023, the country has seen an increase in long-term unemployment, which can have a lasting impact on individuals, including reduced earnings, poorer health, and decreased social support. To address this issue, the government has implemented a public employment programme called Aktion 20.000, aiming to reduce the negative consequences of long-term unemployment.
| Characteristics | Values |
|---|---|
| Unemployment rate in 2023 | 5.24% |
| Total number of unemployed people in 2023 | 240,900 |
| Registered unemployment rate in 2023 | 5.1% |
| Employment rate for persons aged 15 to 64 in 2023 | 74.1% |
| Part-time employment rate in 2023 | 30.9% |
| Share of women employed part-time in 2023 | 50.6% |
| Share of men employed part-time in 2023 | 13.4% |
| Impact of long-term unemployment | Negative impact on psychological and physical health, skills, and stigmatization |
| Government measures to tackle long-term unemployment | Introduction of a public employment programme known as Aktion 20.000 |
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What You'll Learn
Long-term unemployment
In Austria, the unemployment rate refers to the share of the economically active population currently without work but seeking employment. The Austrian employment service (AMS) calculates the unemployment figure based on the unemployed registered at the employment office and the dependent employees registered with the Main Association of Social Insurance Institutions (HV).
The employment rate for persons aged 15 to 64 in Austria was 74.1% on average in 2023. The number of unemployed people was 240,900, representing a 5.1% unemployment rate (registered unemployed). This rate increased by 0.3 percentage points to 5.24% in 2023.
While the data provides insights into overall unemployment trends, it does not specifically differentiate between short-term and long-term unemployment. Further analysis of employment status over extended periods would be necessary to understand the dynamics of long-term unemployment in Austria.
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Impact of Covid-19 on unemployment
The COVID-19 pandemic has had a significant impact on unemployment in Austria. In 2020, the Austrian economy experienced a slump due to the COVID-19 restrictions affecting both supply and demand. This led to a decrease in GDP by 10.4% year-on-year. As a result, unemployment rates rose, with a record high of 522,253 people registered as unemployed in April 2020. The number of long-term unemployed individuals also increased, with 127,479 people unemployed for a year or more in November 2020, the highest number in Austria's history.
The pandemic has particularly affected young people, aged 15 to 24, and older workers (50+). While the unemployment rate among young people improved in the first half of 2021, it was still below pre-crisis levels. The number of apprenticeships also increased, with 21% more vacant apprenticeships in August 2021 compared to the previous year. However, the overall demographic framework must be considered, as the population of 15 to 24-year-olds declined between 2019 and 2021.
To mitigate the impact of the pandemic on unemployment, the Austrian government implemented various measures. Self-employed individuals, freelancers, and small enterprises could apply for financial support through hardship funds, artists' support funds, or recovery support funds. Social transfers were granted to families and unemployed individuals, and tax measures were introduced to relieve companies and households. The federal government's framework for COVID-19 assistance measures comprised about €50 billion, including short-time work compensation, fixed-cost subsidies, guarantees, liabilities, and tax reliefs.
The pandemic has also influenced vaccination policies in the labour market. In Lower Austria, there is a mandatory vaccination policy for employees of the federal state, and in Vienna and Styria, all new hires in health and social professions must be vaccinated. These requirements are extending to other professions in the general labour market. The Austrian Public Employment Service (AMS) has stated that unemployment benefits can be blocked for up to six weeks if a job is refused due to vaccination status, although there are exceptions for medical reasons.
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Political commitment to full employment
Since the 1970s, Austrian governments have demonstrated a commitment to fiscal policy-oriented full employment. This has involved accepting budget deficits to maintain low unemployment rates and develop the Austrian welfare state. For a long time, Austria boasted a strong labour market situation in comparison to other countries. However, the country's labour market performance has weakened since the last economic crisis, with long-term unemployment increasing steadily from 2011 to 2016 and reaching its highest point in 2016.
The Covid-19 pandemic caused a spike in unemployment across Europe, and Austria was no exception. While some job losses were expected to be temporary, policymakers expressed concern about the rise in long-term unemployment during the pandemic. The pandemic's impact on the labour market, coupled with the pre-existing upward trend in long-term unemployment, underscored the need for effective measures to address the issue.
Long-term unemployment has significant adverse effects on individuals. It is well-known that prolonged periods of unemployment can negatively impact a person's psychological and physical health, skills, and employability over time. Additionally, long-term unemployment can lead to stigmatisation and a reduction in social support networks. Moreover, individuals with a history of long-term unemployment tend to earn less than those who have never experienced unemployment, even when employed in the same industry, doing the same job, and controlling for other factors such as gender, age, and education.
To tackle the challenge of long-term unemployment, the Austrian government introduced a public employment programme called Aktion 20.000. This initiative aimed to address the increasing long-term unemployment rate in the country. Despite these efforts, the unemployment rate in Austria increased by 0.3 percentage points in 2023, reaching a total of 5.24%. This rate refers to the share of the economically active population seeking employment and does not include economically inactive individuals such as the long-term unemployed, children, or retirees.
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Unemployment and labour market performance
The unemployment rate in Austria refers to the share of the economically active population that is currently without work but seeking employment. In 2023, the unemployment rate in Austria increased by 0.3 percentage points to a total of 5.24%. This figure represents the registered unemployed, which was 240,900 people on average in 2023. The employment rate for persons aged 15 to 64 was 74.1% on average in the same year, with a part-time employment rate of 30.9%. However, there is a significant gender disparity, with 50.6% of women and only 13.4% of men employed part-time.
Covid-19 caused a spike in unemployment across Europe, including in Austria. While some job losses may be temporary, there are concerns about the rise in long-term unemployment during the pandemic. Long-term unemployment can have lasting negative impacts on individuals, including reduced earnings, poorer health, and decreased social support. It can be a consequence of permanent demand shocks and the 'hysteresis effect', where rises in unemployment persist over time.
To tackle long-term unemployment, the Austrian government introduced Aktion 20.000, a public employment programme. Since the 1970s, Austrian governments have demonstrated a political commitment to fiscal policy-oriented full employment, accepting budget deficits to maintain low unemployment and develop the welfare state. Despite this, the performance of the Austrian labour market has weakened since the last economic crisis, with long-term unemployment continuously increasing from 2011 to 2016 and reaching its highest in 2016.
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Unemployment and health
Unemployment in Austria refers to the economically active population without work but seeking employment. In 2023, the unemployment rate in Austria increased by 0.3 percentage points to 5.24%. This figure represents about 240,900 people.
Austria has a compulsory social insurance system that covers unemployment. The Public Employment Service Austria (AMS), supervised by the Ministry of Labour, Social Affairs, Health and Consumer Protection, administers unemployment insurance. While receiving unemployment benefits, individuals and their families remain covered by health insurance. The long-term unemployed receive an e-card (social insurance card) and full access to free healthcare.
To be eligible for unemployment benefits, individuals must meet specific requirements, such as availability for job placement and the ability and willingness to work. Additionally, they must prove at least 52 weeks of employment subject to unemployment insurance within the last two years. The contribution to unemployment insurance is 5.9% of the contribution base, or gross monthly earnings, regardless of the type of employment. Contributions are paid by both the employer (2.95%) and the employee (2.95%).
Unemployment benefits in Austria consist of a basic sum, a family supplement, and various supplementary benefits. In the case of educational leave, employees are entitled to an educational allowance from the Public Employment Service in the amount of the unemployment benefits they would have otherwise received. EU and EEA nationals are only entitled to guaranteed minimum resources if they are employees in Austria or have resided in the country for over five years. Nationals of third countries must have legally resided in Austria for more than five years to be eligible for these resources.
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Frequently asked questions
The unemployment rate in Austria was 5.24% in 2023. This amounts to 240,900 people.
The Austrian government has demonstrated a long-term commitment to achieving full employment. In response to rising long-term unemployment rates, the government introduced a public employment programme called Aktion 20.000.
Long-term unemployment can have a lasting impact on individuals in Austria. Those with long-term unemployment experience tend to earn less, even when employed in the same industry and role as those who have never been unemployed. They also tend to have less social support and poorer health.
