According to seasonally adjusted numbers from the Icelandic Labour Force Survey, 14,900 individuals were unemployed in November 2020, or 7.1% of the labour force. The seasonally adjusted activity rate was 79.7% and the seasonally adjusted employment rate 74.4%. Comparison with October 2020 shows that the seasonally adjusted employment rate has decreased by 0.2 percentage points and seasonally adjusted unemployment increased by 0.3 percentage points. Over the last 6 months, the trend of the seasonally adjusted employment rate has decreased by 1.0 percentage points and the trend of the unemployment rate increased 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 195,900 (±6,000) in November 2020, which is equivalent to an activity rate of 78.2% (±2.4). Of active individuals, the number of employed persons was estimated to be 183,400 (±5,200) and 12,600 (±3,000) unemployed and looking for a job. The rate of employed individuals of the population was estimated to be 73.2% (±2.8) and the unemployment rate 6.4% (±1.6). It is estimated that 54,700 (±6,600) individuals were inactive in November 2020 or 21.8% of the population.
Comparison with November 2019 shows an increase in the activity rate by 0.7 percentage points between years. The employment rate has decreased by 1.8 percentage points between years and the unemployment rate increased by 3.1 percentage points. Hours worked have decreased by 1.6 hours between years.
Labour market slack – unmet need for work
In November 2020, just over 30,500 individuals had an unmet need for work, or 14.9% of both the labour force and the potential labour force. According to the definition of the Labour Force Survey, 41.1% of individuals with an unmet need for employment were unemployed, 23.9% were ready to work but not looking, 5.4% were looking but not ready to work and 29.6% were employed but wished to work more.
The seasonality of the labour market slack is apparent with the slack usually being lowest in July each year. Looking at the trend, the labour market slack took a big jump upwards at the end of 2008 following the economic crisis. The trend was pretty stable until 2014 where the trend changed direction to downwards. The trend has been rising upwards again since the beginning of 2019. All numbers are weighted by age and gender and rounded to the nearest hundred.
| Table 1. Labour market in November — unadjusted measures | ||||||
| CI | CI | CI | ||||
| 2018 | (±95%) | 2019 | (±95%) | 2020 | (±95%) | |
| Total 16–74 years | ||||||
| Activity rate | 80.8 | 2.3 | 77.5 | 2.7 | 78.2 | 2.4 |
| Employment rate | 78.5 | 2.4 | 75.0 | 2.8 | 73.2 | 2.8 |
| Unemployment rate | 2.9 | 1.0 | 3.3 | 1.3 | 6.4 | 1.6 |
| Hours of work | 38.8 | 1.0 | 40.4 | 1.1 | 38.8 | 1.1 |
| Labour force | 204,900 | 5,800 | 201,300 | 6,800 | 195,900 | 6,000 |
| Employed | 199,000 | 4,800 | 194,600 | 5,200 | 183,400 | 5,200 |
| Unemployed | 5,900 | 2,100 | 6,700 | 2,600 | 12,600 | 3,000 |
| Inactive | 48,600 | 5,900 | 58,400 | 6,300 | 54,700 | 6,600 |
| Est. population | 253,500 | • | 259,600 | • | 250,700 | • |
| Table 2. Labour market last 6 months — seasonal adjustment | ||||||
| Jun-20 | Jul-20 | Aug-20 | Sep-20 | Oct-20 | Nov-20 | |
| Total 16–74 years | ||||||
| Activity rate | 80.0 | 80.0 | 80.7 | 80.1 | 79.0 | 79.7 |
| Employment rate | 75.6 | 75.5 | 75.9 | 75.3 | 74.5 | 74.3 |
| Unemployment rate | 4.4 | 6.4 | 6.1 | 5.3 | 6.8 | 7.1 |
| Hours of work | 37.5 | 37.8 | 37.8 | 38.1 | 38.3 | 38.2 |
| Labour force | 207,300 | 209,700 | 209,100 | 208,400 | 204,100 | 202,400 |
| Employed | 196,400 | 198,700 | 197,400 | 196,100 | 192,700 | 190,100 |
| Unemployed | 8,000 | 12,400 | 12,200 | 9,100 | 13,900 | 14,900 |
| Inactive | 51,400 | 51,200 | 50,700 | 53,100 | 52,900 | 52,200 |
| Est. population | 260,200 | 261,500 | 261,900 | 259,800 | 256,600 | 254,500 |
| Table 3. Labour market last 6 months — seasonal adjustment trend | ||||||
| Jun-20 | Jul-20 | Aug-20 | Sep-20 | Oct-20 | Nov-20 | |
| Total 16–74 years | ||||||
| Activity rate | 80.0 | 80.1 | 80.1 | 79.9 | 79.7 | 79.5 |
| Employment rate | 75.5 | 75.5 | 75.5 | 75.2 | 74.8 | 74.5 |
| Unemployment rate | 5.3 | 5.5 | 5.7 | 5.9 | 6.1 | 6.3 |
| Hours of work | 37.6 | 37.7 | 37.8 | 37.9 | 37.9 | 37.9 |
| Labour force | 208,300 | 208,800 | 208,700 | 207,700 | 206,400 | 205,700 |
| Employed | 199,000 | 199,200 | 198,400 | 196,500 | 194,400 | 193,200 |
| Unemployed | 10,300 | 10,500 | 10,700 | 10,900 | 11,100 | 11,300 |
| Inactive | 52,500 | 52,100 | 51,800 | 51,900 | 52,000 | 52,000 |
| Est. population | 261,700 | 261,900 | 262,000 | 257,400 | 257,500 | 257,600 |
About the data
The Labour Force Survey for November 2020 covers four weeks, from 2 November through 29 November. The sample consisted of 1,529 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 1,483 individuals. Usable answers were obtained from 990 individuals which corresponds to a 66.8% response rate.
In the sample of the Icelandic Labour Force Survey in November 2020, 98 individuals were also recorded unemployed at the Directorate of Labour at the end of November. Of those, 47 individuals responded to the survey, 10 denied participation, 39 could not be contacted and 2 did not fulfil the conditions to be in the sample. The response rate for the group was 49.0%. The response rate of those that are recorded unemployed at the Directorate of Labour is thus 19 percentage points lower than the response rate of other respondents, which was 68.0%. This indicated that those who are recorded as unemployed are less likely to respond to the survey than those who are not recorded. It is likely that this could lead to underestimation of unemployment in the Labour Force Survey. Of those who were on record at the Directorate of Labour and responded to the Labour Force Survey, there were 29 individuals, or 59.6% unemployed according to Labour Force Survey definitions, and 13 individuals were employed or 27.7%. The results also show that 12.8% of those that are classified in general unemployment at the Directorate of Labour are classified as inactive according to the Labour Force Survey and are in the group of those who have an unmet need for employment.
Additional material about labour market slack:
Eurostat coverege of labour market slack
EU labour market in the second quarter 2020
Eurofund report - Estimating labour market slack in the European Union