As was the case with the first quarter of 2020, the second quarter was unusual in many ways as the labour market was characterised by restrictions on work due the Coronavirus (Covid-19). The impact of these factors is to some extent evident in labour force measurements.
Unemployment 6.9%
The average number of persons in the labour force was 208,100 in the 2nd quarter of 2020 according to the Icelandic Labour Force Survey, or 79.9% of the population between 16 and 74 years of age. Of these, 14,300 persons were unemployed, or 6.9%. At the same time, about 2,600 jobs were available in the Icelandic labour market, according to Statistics Iceland’s job vacancy survey, or about 1.3% of jobs, according to previously published figures. In comparison, 9,400 persons were unemployed in 2nd quarter of 2019 which means that unemployment has risen by 2.5 percentage points over the period.
Within the age group 16 – 25 years old, the unemployment rate was 17.7% with 19.4% unemployed in the capital region and 14.3% outside the capital region. In comparison, the unemployments rate was 10.5% in the second quarter of 2019 in the same age group with 10.4% in the capital region and 10.9% outside the capital region.
Larger proportion of inactive
In the 2nd quarter of 2020 a total number of 53,500 individuals were inactive in the labour force or 20.4%. This is an increase of 9,500 individuals or 3.3 percentage points from the year before. During the same period, the estimated population between the age of 16 to 74 years increased by 1.8%, from 256,900 to 261,500.
A similar increase in the rate of inactive individuals was also noticeable in previously released figures from Statistics Iceland on the labour market in June 2020 although the monthly unemployment rate was similar to June 2019. The monthly employment rate was approximately one percentage point lower in June 2020 than the previous year and the monthly proportion of inactive individuals was roughly one percentage point higher.
Decreasing employment rate
The number of employed persons in the 2nd quarter of 2020 was 193,700 which is a significant decrease from the second quarter in 2019 or by 9,800 individuals. The employment rate was 74.1% which is a decrease of 5.1 percentage points from 2019. The number of full time employed decreased by 9,300 from the previous year and 78.5% of employed persons in the 2nd quarter of 2020 were full time employees which is a decrease of 0.8 percentage points from the 2nd quarter of 2019. The quarterly employment rate decreased from 2019 for all age groups, with the most pronounced decrease in the age group between 16 and 24 year old or from 78.3% in 2019 to 66.6% this year.
More people work from home
In the 2nd quarter of 2020, a total of 42.5% of employees aged 25-64 years worked remotely from home in their main job. Thereof, 6.5% were employees who usually worked from home while 35.9% sometimes worked from home. This is an increase from the year before when 30.0% of employees worked remotely from home in their main job, 3.5% usually worked from home and 26.5% sometimes. Working remotely from home does not include domestic work or other jobs unrelated to employees’ main job.
A significant decrease in working hours
In the 2nd quarter the average number of actual working hours where on average 36.7 per week for those that were at work in the reference week, 33.6 hours for women and 39.1 hours for men. Compared to the 2nd quarter of 2020 the average number of actual working hours was 39.7 hours, 36.1 hours for women and 42.5 for men.
In the 2nd quarter the average usual working hours of workers were 38.8 hours in a usual week, compared to 39.8 hours in the 2nd quarter of 2019. The main reasons for working fewer hours than ususal in the 2nd quarter of 2020 were vacation (48.7%), working arrangements (14.4%), Covid-19 (12.2%), variable working hours (11.1%) and illness (3.9%).