Unemployment rate in Luxembourg

Unemployment trends in Luxembourg in 2024

In July 2024, the unemployment rate in Luxembourg reached 5.8%, marking a significant increase compared to the same period in 2023, when it stood at 5.2%. This upward trend has been evident over the past several months, driven by an economic slowdown that has impacted important sectors such as construction, finance, information technology, and real estate.

Source: Eurostat

In terms of the recent trends in recent years, unemployment in Luxembourg peaked at 7.6% in 2020 due to the COVID-19 pandemic. However, it steadily declined, reaching a low of 4.4% by mid-2022. However, in 2023 and 2024, it has risen again due to the slowing economy and reduction in job vacancies.

By August 31, 2024, the number of registered job seekers with ADEM (Luxembourg’s National Employment Agency) had risen to 17,735, representing an increase of 1,679 people, or 10.5%, compared to August 2023. 

Luxembourg unemployment vs. European

When comparing Luxembourg's unemployment rate with the rest of Europe, the picture looks slightly more favorable. As of July 2024, Luxembourg’s unemployment rate stood at 5.8%, which is below the European Union average of 6% and even further below the Eurozone average of 6.4%.

It is also insightful to look at how unemployment trends have evolved across different European countries over time. By examining unemployment data from January at 10-year intervals over the past 30 years, we can identify key trends in Luxembourg, as well as in France, Germany, the Netherlands, Italy, Norway, and Spain.

According to the data, it is possible to see the following trends:

Spain

Historically, Spain has had one of the highest unemployment rates in Europe. In 1994, unemployment in Spain exceeded 20%, and while it decreased in 2004 and 2014, it remains among the highest. This points to a labor market that has struggled to consistently maintain low unemployment rates.

France

France’s unemployment has been relatively stable over the past few decades, though it experienced a slight increase around 2014, followed by a notable decline in 2024. While France’s unemployment rate has never reached the extreme levels seen in Spain, it remains higher than in countries like Germany and Luxembourg.

Italy

Similar to Spain, Italy has experienced persistently high unemployment rates, though with less volatility. While there have been periods of improvement, Italy’s unemployment rate has generally remained elevated.

Luxembourg

Luxembourg consistently maintains one of the lowest unemployment rates in Europe. Although 2024 has seen a slight increase in unemployment compared to previous years, Luxembourg remains well below the European average.

Norway

Norway has consistently had one of the lowest unemployment rates in Europe, in line with other Scandinavian countries. Its labor market has remained stable, reflecting a strong economy and high employment stability.

Netherlands

The Netherlands has maintained low unemployment rates over the years. A notable decrease was observed in 2024, with unemployment dropping to 3.6%, significantly lower than in previous years and compared to other European countries.

Germany

Germany presents an interesting case, having reduced its unemployment rate significantly since 1994, reaching just 3.2% in January 2024. This reflects Germany’s robust economic recovery and the success of its labor and economic policies over the last decade, positioning it as one of Europe’s strongest economies in terms of employment.

Show all

How does it correlate with GDP and labor rate?

Finally, it is also interesting to analyze the unemployment rate together with other indicators such as the GDP growth rate and the labor force participation rate. The following table shows the latest available data. It reveals significant differences in labor markets and economic growth across Europe. 

Spain stands out with a high unemployment rate of 11.5% and a low labor force participation rate of 58.9%, indicating deep structural issues in its labor market despite moderate GDP growth (0.8%). Similarly, Italy faces challenges with a low labor force participation rate (66.9%) and a relatively high unemployment rate (6.5%), although it shows positive economic growth (1%).

Germany and the Netherlands show low unemployment rates (3.4% and 3.6%) and high labor force participation (80.1% and 75.8%, respectively). However, Germany’s slight GDP contraction (-0.1%) suggests potential economic difficulties ahead. France, meanwhile, has a moderate unemployment rate of 7.5% and sluggish economic growth (0.2%).

Luxembourg and Norway stand out for their economic stability. Luxembourg combines a low unemployment rate (5.8%) with moderate economic growth (0.6%) and high labor force participation (74.9%). Norway remains a solid performer, with robust GDP growth (1.4%) and one of the lowest unemployment rates (3.9%) in Europe.

Current labor market situation in Luxembourg

As we have explored throughout this article, the unemployment rate in the country has risen over the past year. Let’s take a closer look at the main factors contributing to this increase.

Economic slowdown

Challenges in the construction sector

Decline in job vacancies

The global economic crisis and inflation have indirectly affected Luxembourg. International economic conditions have reduced demand for services in some sectors, while inflation has driven up operating costs. These factors have led to layoffs or hiring freezes as companies cope with rising expenses and lower demand.

Luxembourg unemployment benefits

If you find yourself joining the ranks of the unemployed and contributing to the statistics we’ve discussed, don’t lose hope. Even if you've lost your job, Luxembourg offers unemployment benefits to support you during this difficult time. 

While this is widely known, what may not be as clear are the specific requirements to qualify for these benefits. It’s not just about being unemployed, there are clear conditions you must meet. Here’s a breakdown of the eligibility criteria for unemployment benefits in Luxembourg.

To qualify for unemployment benefits, you must:

Something's wrong

You don't fit all the requirements

*The mandatory items are marked with red asterisks.

Be involuntarily unemployed

This excludes cases where the employment contract is terminated by mutual agreement, unjustified resignations, or dismissals for serious misconduct.

Be between the ages of 16 and 64.

Be fit for work, available and willing to accept any appropriate job, as defined by Luxembourg regulations.

Be registered with ADEM

Any official job seeker should address Luxembourg's National Employment Agency and submit a request for full unemployment benefits.

Have prior employment experience

Have been employed under one or more work contracts for at least 26 weeks (with a minimum of 16 hours per week) during the 12 months (or more, depending on the case) prior to registering as a job seeker with ADEM.

Be a resident of Luxembourg.

Do not hold a position as a manager, administrator, executive director, or daily operations manager in a company.

Do not hold a business permit.

Something's wrong

You don't fit all the requirements

*The mandatory items are marked with red asterisks.

We have seen the latest data on Luxembourg's unemployment rate show a slight increase over the last year, which has been caused mainly by an economic slowdown that has affected important sectors such as construction, finance and technology. However, Luxembourg remains below the European average and continues to outperform many other European countries. In addition, its strong social services such as unemployment benefits provide important support to those affected by job losses.

While the global economic situation will undoubtedly continue to influence Luxembourg’s labor market, the country’s overall stability and relatively low unemployment rate compared to its neighbors suggest that Luxembourg remains a strong player within the European economy.