Chile: November posted accelerated recovery of jobs lost since the social crisis and pandemic

RIO DE JANEIRO, BRAZIL – The Chilean economy continued to recover the jobs lost at the worst moment of the health emergency, in July 2020.

The September-November 2021 mobile quarter confirmed the rebound in employment, with the unemployment rate dropping by 3.3 percentage points compared to last year, to reach 7.5%. In addition, the employment rate reached 53.6%. Thus, 74.6% of the jobs destroyed during the peak of the health emergency, when nearly 2 million people were unemployed, have been recovered.

The labor market has not only closed its gap with respect to the beginning of the pandemic, but also to the period prior to the social crisis that affected the country in October 2019.

The Employment Gap Indicator, prepared by the Liberty and Development Institute (LyD), shows that in the September-November mobile quarter of 2021, the gap between total employment and the period prior to the social crisis and the pandemic continued to narrow. Thus, the gap for overall employment dropped from 6.46% in the August-October mobile quarter to 5.89% in the September-November period.

“In terms of the labor market, despite the observed rebound in economic activity, with a Monthly Economic Activity Index of 14.3% for November, about 5.9% of the jobs lost in the past 21 months have not yet been recovered,” the report highlights.

In terms of its composition, the gap in private sector employment decreased from 4.08% to 3.88% with respect to the previous quarter, while the reduction in the case of self-employed jobs – and therefore more precarious – was milder, with the gap dropping from 5.69% to 5.61% between the quarters ending in October and November, respectively.

ONLY AYSÉN RECOVERED IN FULL

Based on data published by the National Statistics Institute (INE) from the National Employment Survey (ENE), LyD analyzes the gap between the baseline (third quarter of 2019) and the subsequent employment situation.

The analysis considers the total number of employed as well as private sector employees and the self-employed.

In order to draw comparisons between different quarters, LyD worked with seasonally adjusted employment data based on the same INE methodology.

Intervals are determined through the development of percentiles considering 240 gap observations between the baseline and the October-December 2020 quarter, which enable to establish the following categories: “severe” situation: the employment gap exceeds 18% (red); “intensive” situation: the employment gap ranges between 17% and 11% (orange); “intermediate” situation: the employment gap stands between 10% and 2% (yellow); and “high”: when the current employment is higher than that observed in the baseline period (green).

In the fourth, there was heterogeneous behavior among the regions, since 7 decreased their total employment gap with respect to the base period, while in 8 regions it increased and in 1 it remained the same. Thus, only 1 region – Los Lagos – is in red; 2 in orange (Coquimbo and Los Ríos); 12 in yellow (Arica y Parinacota, Tarapacá, Antofagasta, Atacama, Valparaíso, Metropolitana, O’Higgins, Maule, Ñuble, Biobío, Araucanía and Magallanes) and only 1 in green (Aysén).

In the calculation of private sector employment, Antofagasta and the Metropolitan Region are the only areas reporting a better scenario today than before the pandemic and the social crisis, while at the other end is Los Lagos, with a gap of 20.9%. There was a decrease in the gap in private sector employment in 5 regions and an increase in 8.

In the self-employment indicator, O’Higgins, Ñuble, Biobío and Aysén show an increase with respect to the baseline of 10.3%, 22.1%, 5.6% and 2.6%, respectively. In other words, there are more independent jobs today than in the pre-pandemic and social crisis phases.

As in the previous quarter, Coquimbo (19.3%) and Los Lagos (18.8%) posted the largest drops in this category. Thus, there was a decrease in the gap in 9 regions and an increase in 3.