Higher Unemployment and Fewer Foreign Workers Expected Skip to content

Higher Unemployment and Fewer Foreign Workers Expected

[vc_row][vc_column][vc_column_text css=”.vc_custom_1555061391741{margin-bottom: 0px !important;}”]Recent data published by Statistics Iceland shows that during the first three months of the year, there were 3,500 vacant jobs on the Icelandic labour market. This puts the country’s job vacancy rate at 1.5% during the first quarter of 2019. Other recent employment data shows a gender gap in full-time employment rates, and suggests that in the near future, unemployment is likely to rise and fewer foreign nationals will be seeking work in Iceland.

Fewer women in full-time positions than men

As Kjarninn reports, Statistics Iceland has been collecting data on the labour market in Iceland since 2003, but this is the first time that data on job vacancies has been made public. The survey has been conducted in collaboration with rest of the European Economic Area (EEA) in order to allow for job vacancy comparisons between European countries. As a point of reference, the job vacancy rate for EU countries in the last quarter of 2018 was, on average, 2.3%. The highest rate was in the Czech Republic, at 6%, and the lowest was in Greece, at .4%.

Upon examining data for the end of the fourth quarter in 2018, Kjarninn found that on average, there were 203,700 people between the ages of 16 to 74 on the Icelandic labour market. Of these, 198,900 were working, while 4,900 people were unemployed and seeking jobs. Job market participation was at 80%, the employment rate was 78.6%, and the unemployment rate was 2.4%. The number of working individuals increased by 4,500 between 2017 and 2018, while the employment rate dropped by half a percentage point.

The data also showed that there were 148,500 people working full-time at the end of the fourth quarter of 2018, or 74.7%. At the same time, 50,400 people, or 25.3%, were only employed part-time. The number of people in full-time positions increased by 4,800 people, while the number of people in part-time positions remained unchanged. There was a considerable gender divide when it came to full-time employment: 62.3% of working women were employed full time, versus 88.6% of working men.

Unemployment projected to rise

Unemployment was highest among workers aged 16 to 24 at the end of the fourth quarter in 2018, or 5.3%. If education levels are examined, people who have only completed a primary education had a 4.3% unemployment rate. Individuals who have completed vocational training or upper secondary education had an unemployment rate of 2.1%; university graduates had a 1.3% unemployment rate. There was no difference in the unemployment rates in and outside the capital area.

Per Statistics Iceland data, unemployment has been relatively stable for the last two years, although the Directorate of Labour has seen an increase in the number of people registered for unemployment in the last few months.

In February 2019, unemployment reached 3.1%, versus 2.1% in February 2018. According to the Directorate of Labour, following the WOW air bankruptcy in March 2019, 1,600 people were laid off and more are expected. If all of these people go on unemployment, the overall unemployment rate would immediately jump to 4%. Landsbankinn, which also keeps employment data, says that it is not currently possible to fully predict employment trends in the coming months, but says that unemployment will doubtlessly increase.

Fewer Foreign Workers Expected

The percentage of foreigners living and working in Iceland has never been higher than it was in 2018, when immigrants made up 12.6% of the population. From 2017 to 2018, 13,930 foreigners moved to Iceland, which was just under a 46% increase of foreign nationals in Iceland. This increase is credited to the booming tourism industry and availability of jobs in the tourism, service, and construction sectors.

As the economy begins to cool, however, the number of foreign nationals coming to work in Iceland appears to be going down as well. According to Statistics Iceland data, 820 foreign nationals moved to Iceland in the first two months of 2019, versus 1,620 foreign nationals who moved to the country in the first two months of 2018. This suggests that there will be fewer foreigners moving to Iceland in at least the first quarter of the year, if not the whole year overall.[/vc_column_text][/vc_column][/vc_row]

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