The number of unemployed people in Iceland in January was 7,000 people according to seasonally adjusted figures from Statistics Iceland's labour market survey, or 3.4% of the labour force. Seasonally adjusted labour force participation was 81% while the seasonally adjusted percentage of employed persons was 78%.

Seasonally adjusted unemployment trends continue to be steady while a slight upward trend in the percentage of employed persons is seen over the past six months, or from 77.6% in August to 77.9% in January. A slight upward trend is also observed in labour force participation over the same period, or by 0.2 percentage points.

According to an unadjusted survey it is estimated that around 209,000 people aged 16-74 years were on the labour market in January 2020. This is equivalent to 80.7% (± 2.6) activity rate. Of the labour force 201,500 (± 3,000) were found to be employed and 7,400 (± 700) were unemployed and looking for work. Thus, the employment rate was 77.8% (± 2.4) and the unadjusted unemployment rate was 3.6% (± 1.1).

When the unemployement rate is compared with that of January last year a 0.7 percentage point increase is observed as well as a 1.4 percentage point decrease in the employment rate.

It should be noted that all numbers are rounded to the nearest hundred and results are weighted by sex and age groups. All numbers for January 2020 are preliminary until the end of the 1st quarter.

Flow Chart — Labour force 16–74 years — January 2020 unadjusted measures.

Figure 1. Figures may not add up because of rounding. CI (95%) Unemployment rate: Total ±1.1; males ±1.5; females ±1.9.

Table 1. Labour market in January unadjusted measures
CI CI CI
  2018 (±95%) 2019 (±95%) 2020 (±95%)
Total 1674 years
Activity rate 81.3 2.3 81.6 2.1 80.7 2.6
Employment rate 78.2 2.5 79.2 2.2 77.8 2.7
Unemployment rat 3.8 1.4 2.9 1.1 3.6 1.1
Hours of work 38.5 1.2 38.4 1.0 37.8 0.8
Labour force 201,100 5,600 207,600 5,300 209,000 3,100
Employed 193,400 6,100 201,500 5,600 201,500 3,000
Unemployed 7,700 2,900 6,000 2,300 7,400 700
Inactive 46,100 5,600 46,800 5,300 50,200 2,000
Est. population 247,200 254,400 259,000

Table 2. Labour market last 6 months seasonal adjustment
 Aug-19Sep-19Oct-19Nov-19Dec-19Jan-20
Total 1674 years
Activity rate 80.5 80.9 81.1 80.5 80.7 81.0
Employment rate 77.3 77.9 78.1 77.4 77.6 78.0
Unemployment rate 4.4 3.6 3.4 4.1 3.9 3.4
Hours of work 40.1 40.1 40.4 40.3 39.9 39.6
Labour force 205,700 208,100 210,200 205,800 209,100 208,700
Employed 196,500 200,500 202,800 198,200 202,200 202,700
Unemployed 8,900 6,800 7,100 7,100 7,300 7,000
Inactive 51,100 49,200 47,500 52,600 49,700 50,400
Est. population 256,800 257,300 257,900 258,400 258,900 259,100

Table 3. Labour market last 6 months seasonal adjustment trend
 Aug-19Sep-19Oct-19Nov-19Dec-19Jan-20
Total 1674 years
Activity rate 80.7 80.8 80.8 80.7 80.7 80.9
Employment rate 77.6 77.8 77.8 77.7 77.6 77.9
Unemployment rate 3.6 3.7 3.7 3.7 3.8 3.7
Hours of work 40.0 40.1 40.2 40.2 40.1 40.0
Labour force 208,000 208,200 208,400 208,600 208,900 209,400
Employed 199,300 200,000 200,800 201,100 201,200 202,600
Unemployed 7,300 7,400 7,300 7,300 7,200 7,300
Inactive 49,000 49,200 49,500 49,700 49,800 49,700
Est. population 256,800 257,300 257,900 258,400 258,900 259,200

About the data
The labour force survey in January covers five weeks, from December 30th, 2020 to February 2nd, 2020. A random sample of 1,909 persons aged 16–74 years who were domiciled in Iceland were randomly selected from the National Registry. Excluding those who were deceased or residing abroad the net sample was 1,868 individuals. A total of usable answers were obtained from 1,183 individuals which corresponds to a response rate of 63.3%.

In recent years, participation in the Icelandic Labour Force Survey has decreased. Since 2012, the total response rate has dropped from about 85% to about 60%. Although this development is in line with developments in response rates within other European countires the monthly figures for the Icelandic Labour Force Survey are particularly sensitive to changes in the response rate of specific groups because of small sample sizes. One such group constitutes those who are unemployed.

In the Labour Force Survey data in January 2020 a considerably high rate of total non-response was observed among those who were registered as unemployed during the reference period. In order to address attrition in the measurement of unemployment, unemployment status was imputed for those who were registered as unemployed and had been defined as unemployed in previous surveys when contacted - or had defined themselves as unemployed.

In this context, it is proper to note that Statistics Iceland defines unmemployment in line with the definition used by the International Labour Organization. According to this definition, those are considered as unemployed who 1) are without a paid job in the reference period, 2) are actively seeking a paid job on the Icelandic labour market, and 3) could start working within two weeks if they were offered a job.

Hence, the definition used by Statistics Iceland is more specific than the right to receive unemployment benefits - which in turn partly explains the difference between unemployment numbers published by Statistics Iceland and the unemployment numbers published by the Icelandic Directorate of Labour.

Statistics