Economic activity of the population has reached a record since 1992

The level of economic activity of population of Russia in July 2016 for the first time exceeded 70%, noted the Bank of Russia in the review “what do the trends”, published 1 Sep. The indicator is defined as the ratio of the number of employed and unemployed (labor force) to population in working age from 15 to 72 years.

The percentage of people employed and unemployed increased in comparison with July of last year, and the population’s economic activity reached a maximum value in the entire history of observations, which, as explained in the press service of the Central Bank, conducted since 2009. As follows from the data of Rosstat, which is based on CBA, now the level of economic activity of the population is 70.1 per cent. Above this value it was raised only at the end of 1992 (70,3%), follows from the data of Rosstat.

The growth of economic activity of citizens is made possible due to negative demographic trends, including reducing the number of people in working age (that is, the denominator of the formula economic activity), stress in CB. “This combination significantly reduces the risks of increasing unemployment and can create the problem of shortage of qualified personnel. The latter may be one reason quite confident of the dynamics of wages in 2016,” says the regulator. Unemployment tends to decline with demographic trends towards ageing, explains economist “VTB the Capital” Alexander Isakov. Older people go to work and cease to be part of the economically active population. Their place is taken by young people, which leads to the growth of the labor force. But they, accordingly, do not have the skills which have older employees.

Economic activity of Russians is higher than in countries with similar economies, says Isakov. Now she rises at the expense of older people, believes Professor of the Department of labour and social policy, Ranepa Alexander Shcherbakov. They are trying to keep employers or they return to work from retirement, says the expert. Replenishment of the workforce at the expense of young people is much smaller, and it is connected with the demographic situation, he continues. In addition, employers need a skilled workforce, and the level of qualifications among older people in above points Shcherbakov. In his opinion, the level of involvement of the population in the workforce will continue to grow.

The labour force in absolute terms is also increasing. From 2007 to 2015, she was at the level of 75,3–75,8 million people, and by the end of 2015 amounted to slightly less than 76,6 million, an increase of almost 1.2 million compared to 2014, according to Rosstat.

The number of economically active population in July rose slightly compared to July of last year to 77.2 million people (plus 88 thousand, or 0.4%). Therefore, intensification of employment or unemployment, the growth of economic activity cannot be explained, says the Deputy Director of the Centre for labour market studies Higher school of Economics Rostislav Kapelyushnikov. Involvement in the work force is growing due to the demographic situation confirms it, namely, the reduction of the working age population: aged 15 and over reached a small number of people, but many were older than 72 years.

But against this background, economic activity of the population does not fall, and even increased. This happened for two reasons, the expert said. The first is the reduction in the workforce of young people with low level of economic activity (young people prefer to learn, not to work). Second, the growth of people with higher education among economically active population, their level of participation in the labour force, on the contrary, is extremely high. “These two long-term trend if they are not subject to any economic fluctuations, every year a little bit tighten up the participation rates in the labor force”, — says Kapelyushnikov. According to him, the scrapping of these trends are not observed, therefore, the economic activity of the population will continue to rise. “However, this does not indicate welfare or the troubles in the Russian labor market”, — emphasizes the expert.

On the background of growth of economic activity of Russians falling unemployment. In July, it reached 5.3% — the lowest since October last year. However, as the Central Bank, with the elimination of seasonal factors, the unemployment rate in July to 5.6%, but is still less than a month earlier.