Unemployment Dropped to 3.9% in Iceland Last Month Skip to content

Unemployment Dropped to 3.9% in Iceland Last Month

By Yelena

Reykjavík restaurant workers
Photo: Golli.

Registered unemployment in Iceland measured 3.9% in May, a reduction of 0.6% compared to the previous month. On average, 812 fewer people were unemployed in the country in May than in April. Unemployment is higher among foreign residents, who have more difficulty finding employment that corresponds to their education or training than Icelandic citizens.

Unemployment decreased in all regions of the country last month, according to the Directorate of Labour’s monthly report. As per usual, unemployment remains highest on the Suðurnes peninsula in Southwest Iceland, where it nevertheless decreased from 7.6% in April to 6.6% in May. The next-highest regional rate is in the capital area, where unemployment decreased from 4.7% to 4.2% between the two months. Unemployment rates in May were somewhat higher among men than women.

Recognition of foreigners’ education lacking

Of the 7,713 individuals that were on the unemployment register at the end of May, 3,331 were foreign citizens, 526 fewer than in the previous month. This number nevertheless reflects higher unemployment rates among foreign residents of Iceland than Icelandic citizens, or 8.5%, compared to the overall rate of 3.9%. Foreign citizens make up 43% of those on the unemployment register, while they make up around 15% of the total population of Iceland.

The Director of Iceland’s Labour Directorate, Unnur Sverrisdóttir, says many foreigners on the unemployment register would be working if their education and training from abroad were recognised in Iceland. “[They] often have a lot of difficulty in getting their work experience and education recognised, that is often the explanation for [them being unemployed],” Unnur told RÚV. “There’s a certain amount of paperwork and of course some obstacles there. And that’s what we work most on, helping people to find a way to have the knowledge and education that they bring with them – which is often extensive – recognised.”

The Directorate of Labour expects the decrease in unemployment to continue, projecting a rate of 3.5-3.8% in June.

Sign up for our weekly newsletter

Get news from Iceland, photos, and in-depth stories delivered to your inbox every week!

* indicates required

Subscribe to Iceland Review

In-depth stories and high-quality photography showcasing life in Iceland!