Chile’s workforce growth drives unemployment rate to two-year low of 8.2%

According to the National Employment Survey (ENE) by the National Institute of Statistics (INE), Chile’s jobless rate fell to 8.2% from September to November 2024.

This marks a drop of 0.5 percentage points compared to last year, largely due to a 1.0% rise in the labour pool, which was overtaken by a 1.6% increase in the number of employed.

This dip underscores the robustness of the labour market, even as it grapples with hurdles in different sectors.

Encouraging job trends and fewer job seekers

In the same timeframe, the number of jobless individuals in Chile decreased by 4.9%.

This decline was mainly fueled by those who had been out of work and folks on the hunt for their first job.

Interestingly, there was a 0.9% drop in the latter group, hinting at either a move towards holding onto jobs longer or simply more job opportunities cropping up.

Looking back over past years, the participation rate at 61.6% and the employment rate at 56.5% nudged slightly by 0.1 pp and 0.4 pp, respectively, pointing to a general uptick in labour market involvement.

Gender differences in unemployment rates

Diving into the specifics of gender-based unemployment rates shows some notable differences.

For women, the unemployment rate was at 9.1%, which is a slight rise of 0.1 pp during the study period.

This increase is tied to a bigger boost in the female labour pool (1.2%) compared to the rise in female employment (1.1%).

As a result, female unemployment edged up by 1.8%.

Women’s participation and occupation rates were at 52.4% and 47.6%, showing some gradual upward movement, though the number of women not in the workforce went up by 0.6%.

Additionally, men’s unemployment rate slid down to 7.5%, a noticeable drop of 1.0 pp over the year.

This dip is linked to a smaller increase in the male workforce of 0.9%, overshadowed by a heftier 2.0% bump in male employment.

Notably, the number of jobless men fell dramatically by 10.4%.

Still, the male labour participation rate dipped slightly to 71.1%, while the employment rate climbed to 65.8%, up by 0.7 pp.

Sectors fueling employment growth

The overall 1.6% rise in employment over the past year is thanks to gains in both male (2.0%) and female (1.1%) employment.

Standout sectors driving this growth include health services (9.0%), professional activities (8.7%), and education (3.6%).

There was also a significant boost in formal salaried positions (3.1%) and informal salaried roles (4.3%), suggesting varied opportunities across the employment spectrum.

Challenges of informal employment

While the increase in employment is promising, the rate of informal employment remains a sticking point.

The informal employment rate was at 26.9%, showing a slight decline of 0.6 pp from last year.

The drop in informal employment was mainly among men, whose informal jobs decreased by 2.0%.

The sectors hardest hit include commerce (down 4.5%) and other service activities (down 8.0%).

Additionally, categories of informal workers, especially self-employed individuals (-3.5%) and unpaid family workers (-9.3%), faced significant challenges.

A mixed outlook for the Chilean labour market

All in all, the latest employment figures offer a mixed but hopeful snapshot of the Chilean labour market as it navigates the tricky waters of economic recovery.

With the unemployment rate at a two-year low and a gradual rise in workforce participation, there are definite signs of resilience.

However, it’s crucial to address the challenges posed by gender disparities and the persistent nature of informal employment.

Crafting targeted policies to bolster job security and economic inclusivity will be key as Chile looks to achieve sustainable job growth moving forward.

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