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Iceland - National Level

Short overview of the labour market

 

Iceland has a population of 348 580 (1 January 2018) and the population growth was 1.8% in 2016. The Icelandic nation is one of the youngest in Europe – with an average age of around 38 and around 70% of the population being under fifty. The Icelandic labour market is characterised by a high participation rate; in 2016, 83% of all able-bodied individuals aged 16-74 participated in the labour market.

The most important sectors in Iceland are service industries such as travel, financial services and health services, miscellaneous industries, agriculture and fishing. The relative importance of these sectors has changed somewhat recently; the significance of service industries, for example, has increased considerably in recent years while fishing and other production industries have declined.

36% of people in the labour market are university graduates, 38% have higher education (including vocational qualifications) and 26% have secondary education. Another characteristic of the Icelandic labour market is the high proportion of trade union membership, at around 85%.

Unemployment numbers have decreased considerably since they reached a peak in the year 2009 as a result of the economic crisis in the autumn of 2008. In 2017 the registered unemployment rate was on average 2.2%, 1.9% among men and 2.5% among women. Registered unemployment among young people between the ages of 18-24 was on average 1.8%. Overall, 24% of the unemployed are foreign citizens and the majority of them (61%) are Polish. 

Over recent years the labour market has followed a trend of growth, with employment increasing by a yearly average of 4400 over the period 2012–2017. This increase in jobs has gone hand in hand with economic growth and, with a downturn on growth on the horizon, this figure is likely to decrease in the coming years. 

It is estimated that about 24 000 foreign nationals are employed in the Icelandic labour market, which is over 11% of the total workforce, and according to forecasts this number will continue to increase, although the increase is likely to slow down.

Text last edited on: 09/2018


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