Skills supply and demand in Iceland 2021-2035

Updated: 15 December 2021

Statistics Iceland's 2021 skills forecast publishes forecasts of labour supply and demand until 2035. The results are shown for 10 fields of study, 4 levels of education attainment and 10 industry sections. A linear trend of previous years is estimated and extrapolated to the year 2035. The forecasts are based on the assumption that education, employment and the labour market in Iceland will remain largely unchanged during the forecast period, as the linear trend of previous years is used for projections. Also, it is necessary to emphasize that this is the first edition of Statistics Iceland's skills forecast, but an annual update of the skills forecast is anticipated.

During the period 2017-2035, the population, aged 16-74 years, is expected to increase by 36 thousand, which corresponds to an 19% increase. The figure below shows that the largest relative increase compared with 2017 is expected among those working in financial and insurance activities (ÍSAT2008 category K) and those working in professional, scientific, technical, administration and support service activities (ÍSAT2008 categories M-N) of 99% (5,700 individuals) and 53% (9,500 individuals), respectively. The most decrease is forecasted to be among those working in agriculture, hunting and forestry (ÍSAT2008 category A) or about 61% (4,000 individuals). It is important to emphasize that the calculations of the number of employees by industry section takes into account the impact of the fourth industrial revolution on industries according to the Prime Minister's Office report from 2019, which assumes a decrease due to automation in ÍSAT2008 categories A, C, F, G, H, I, N, P, Q and R.

During the forecast period, job vacancies will decline in all industry sections except professional, scientific, technical, administration and support service activities (ÍSAT2008 categories M-N) where the number of vacancies is forecasted to remain virtually unchanged until 2035.

The level of educational attainment in Iceland has risen over recent years. This trend is expected to continue throughout the forecasted period, as can be seen in the figure below. Compared with 2017, the proportion of people with a tertiary education, aged 16-74, is expected to increase from 30% to 44% (48,000 individuals) in 2035. It is also expected that the proportion of people only with a basic education will decrease by 12% (24,600 individuals) during the same period. It can be assumed that this is e.g. because employers are increasingly requiring at least upper secondary education and since more people with upper secondary education are replacing those with basic education as the highest level of education.

It is estimated that the number of people with further education (other than ÍSNÁM2008 field 0, general education) will increase significantly during the forecasted period except those educated in agriculture (ÍSNÁM2008 field 6) or services (ÍSNÁM2008 field 8). As can be seen in the figure below, it is forecasted that the largest proportional increase will be among those educated in science (ÍSNÁM2008 field 4) or a 59% increase (4,000 individuals). This increase in most fields of education could be attributed to an increased population during the period as well as an increased demand for higher education in the Icelandic society.

Statistics

Skills supply and demand 20211215 (xlsx)

Metadata

For further methodological description see metadata.