Einar H. Dyvik
Research expert covering Nordics and global data for society, economy, and politics
Employment in Iceland - Statistics & Facts
The annual employment rate in Iceland dropped from 84 percent in 2019 to 80 percent in 2020, and remained short of 80 percent in 2021, before increasing again in 2022. However, even though the Icelandic economy was hit by the COVID-19 pandemic, especially the tourism industry, the country still has one of the highest employment rates among OECD-countries. Moreover, the employment rate is higher among men than among women, and it was lowest among young adults. The saga island was hit hard by the financial crisis in 2008 and 2009, which is underlined by the fact that the number of unemployed people in the country more than doubled from 2008 to 2009.
In Iceland, a pay gap between men and women continues to exist. In 2022, women earned nine percent less than men on average. Despite this, Iceland ranks among the most gender equal countries in the world, and the pay gap is explained by Iceland's strong social care system and high wages, giving parents (usually mothers) greater opportunities to stay at home with young children.
Reducing working hours and a gender pay gap
In 2022, Icelanders worked an average of 35.5 hours per week, which was significantly less than the previous years. Iceland had a trial project from 2015 to 2019 where it reduced weekly working hours from 40 to 35 or 36 hours; after its successful implementation, the change was made permanent in 2021. Furthermore, men spend more time working than women, and the agriculture, forestry, and fishing industry clearly had the highest average working hours.In Iceland, a pay gap between men and women continues to exist. In 2022, women earned nine percent less than men on average. Despite this, Iceland ranks among the most gender equal countries in the world, and the pay gap is explained by Iceland's strong social care system and high wages, giving parents (usually mothers) greater opportunities to stay at home with young children.
The impact of COVID-19
The monthly number of unemployed people in Iceland increased greatly from March to April in 2020 following the outbreak of COVID-19, but remaine relatively stable since may 2021. Moreover, the pandemic has hit different industries in varying ways. Whereas the number of employees fell significantly in the tourism and accommodation and food services industries, it remained stable within wholesale and retail trade. Furthermore, the number of people who sometimes work from home increased slightly since the end of 2019.
