The employment trend in Luxembourg was the inverse of the situation observed in the EU at the onset of the pandemic. Pressmaster/Shutterstock.

The employment trend in Luxembourg was the inverse of the situation observed in the EU at the onset of the pandemic. Pressmaster/Shutterstock.

Employment jumped 2% in Luxembourg during the first year of the pandemic. Statec explains how.

While the EU average saw employment shrink 1.5% from 2019 to 2020, Luxembourg was one of three European countries to record a growth in jobs.

“Many factors contribute to this good performance, in particular better resistance of the activity and high use of teleworking. While the partial unemployment scheme plays an important role in avoiding employment losses, it does not appear to be a major factor behind the differences in employment development between countries,” Statec writes in its latest .

Working hours declined

Statec observed a 3.3% drop in working hours in Luxembourg, related to the pandemic, but also a 0.7% decline in gross added value, the second-lowest loss to be recorded by an EU country. “The main reason for this divergence was an exceptional growth in the IT and communication sectors (annual growth of 17%) and to a lesser extent the difference for certain branches in the total number of hours worked and gross added value,” Statec writes.

Applying the Oxford University stringency index, showing how the severity of covid restrictions was compared within the EU, the report author found that Luxembourg had a strong negative correlation between restrictions and gross added value but this lessened over the course of 2020, “probably due to better adaptation to measures by firms and households and more targeted measures”. The effect of restrictions was almost zero for the financial sector, the author wrote, adding that activity and related hours worked in Luxembourg may have benefited from the fact that the country imposed “less stringent measures than in other European countries. Indeed, in the eurozone, only Finland and the Baltic States imposed fewer restrictions than Luxembourg.

Employment fluctuations

Luxembourg employment fluctuated during the course of 2020, dropping 0.5% during Q1 and recovering in Q3. Agriculture and industry were the only two sectors to record a decline. Luxembourg recorded the strongest growth in employment in public administration, education, health and social work, real estate and construction. The growth in public administration could be related to the large-scale testing, contact tracing and dual education measures brought in as a result of the pandemic, the report author suggests.