According to seasonally adjusted figures from the Icelandic Labour Force Survey, 16,600 individuals were unemployed in January 2021, or 8.2% of the labour force. The seasonally adjusted activity rate was 76.7% and seasonally adjusted employment rate 71.5%. Comparison with December 2020 shows that the seasonally adjusted activity rate decreased by 1.4 percentage points between months and the seasonally adjusted unemployment rate increased by 0.8 percentage points. Over the last 6 months, the trend of the seasonally adjusted employment rate has decrease by 1.0 percentage points and the trend of the unemployment rate decreased by 1.0 percentage points.

Based on unadjusted measures, the number of 16-74 year olds active on the labour market was estimated to be 199,400 (±7,700) in January 2021, which is equivalent to an acitivity rate of 76.0% (±2.9). Of active individuals, the number of employed persons was estimated to be 182,300 (±5,700) and 17,100 (±3,800) unemployed and looking for a job. The rate of employed individuals of the population was estimated to be 69.5% (±3.2) and the unemployment rate 8.6% (±1.9). It is estimated that 62,800 (±7,400) individuals were inactive in January 2021 or 23.9% of the population. Comparison with January 2020 shows that the employment rate has decreased by 5.6 percentage points between years and the unemployment rate increased by 4.4 percentage points.

Changes on survey weights and population estimates
It is important to point out to users that new survey weights and population estimates have been implemented in Statistics Iceland’s Labour Force Survey. The changes were made parallel to changes to the LFS questionnare and the sample frame of the survey, in harmony with a new framework regulation for the production of European Social Statistics. The purpose of implementing new survey weights and population estimates was to decrease nonresponse bias in the results and ensure more detailed and consistent estimates on population figures based on the Labour Force Survey.

Working time estimates in the Labour Force Survey
As was explained in January’s news release on the Labour Force, the measurement of average hours worked in the reference has been changed. The purpose of changing the questions is to better capture absence from work in the reference week, by explicitly asking respondents to exclude time they were absent due to personal errands and time spent on main meal breaks in their answer on working time. The first results show that the measured average hours worked in the Labour Force Survey in January 2021 was 36.4 hours (±1.2). Considerable fluctations have been seen in measurements of working time in the Labour Force survey so further conclusions of the effects of changed measurements are not timely. Still, it is likely that the changes will have an effect on the time series in a way that the measured working hours will decrease and we will see a break in the time series. On the other hand, the reader should bear in mind that during the same time period effects of a shorter work week in Iceland due to collective agreements are seen. Moreover, considerable fluctations have been seen on the working time from the beginning of 2020 due to the Covid-19 pandemic.

About the data
The Labour Force Survey for January 2021 covers four weeks, from 4 January through 31 January 2021. The sample consisted of 1,521 individuals, 16-74 years old and domiciled in Iceland. When those who were domiciled abroad or deceased had been excluded, the net sample consisted of 1,486 individuals. Usable answers were obtained from 984 individuals which corresponds to a 66.2% response rate.

Improvements in the processing of the Icelandic Labour Force Survey - Working paper