Labour force
25. Jan 2024
Labour force declines slightly
The Faroese labour force consists of just over 32,200 employed and 400 unemployed people. Employed people are employees and self-employed businesspeople. Unemployed people are those without a job, who actively seek work and are available for work within 2 weeks. The internationally comparable labour force survey includes both unemployed people who meet the above criteria and those who are not registered with the unemployment office (ALS) or who receive welfare benefits due to unemployment.
The labour force dipped by just over 200 people compared to 2022, largely driven by a decline in unemployment, while the number of employed people remains stable. The inactive population increased by 400 year-on-year, reaching 6,250 in 2023. The 2023 labour force consisted of about 17,600 men and 15,000.
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Activity rate falls across sexes and regions
The activity rate is the proportion of the working-age population (ages 15-74) who are employed or actively seeking work.
The overall activity rate in 2023 was 83.9% - 85.6% for men and 82.1 for women. The activity rate declined by 1% year-on-year for both sexes.
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All regions experienced a declining activity rate, with the biggest drop in Eysturoy (1.6%).
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Lowest activity in Sandoy and Suðuroy
Sandoy and Suðuroy have the lowest activity rate, at below 78%. All other regions have a rate of above 82%. Suðurstreymoy and Eysturoy have the highest rates, at above 85%.
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The activity rate difference between the sexes ranges between 3% and 4% in all regions. At 75%, women in Sandoy have the lowest rate, while men in the Suðurstreymoy region have the highest rate, at 87%.
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Women exit labour market earlier
Men and women have fairly even activity rates up to the age of 60. Beyond this age, women’s activity rate declines faster than that of men. The biggest difference can be seen in the 65-74 age group where the rates are 59% for men and 42% for women. Contrastingly, in the 20-24 age group, women have a 5% higher activity rate than men.
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About the labour force survey
The annual labour force survey is conducted in accordance with the general guidelines of the International Labour Organization (ILO), a tripartite United Nations agency. This allows for direct comparisons between the Faroese figures and those from other nations.
The statistics are compiled from public registers such as the national register, the tax register, the VAT register, the unemployment office and grant registers administered by the ministries of education and social affairs. Furthermore, about 1,000 people who are not included in the administrative sources are selected at random for phone interviews with the aim of gathering information about their employment circumstances. These interviews provide the key data points for estimating the employment circumstances of the roughly 5,000 unregistered individuals. Conducted yearly in late November, the survey captures the labour force status of permanent residents aged 15-74 during the week containing the 15th of November. Anyone who worked for more than an hour in that period, including unpaid work, is considered employed. To be counted as unemployed, individuals must actively seek work and be available within 2 weeks.
The labour force includes all economically active individuals such as employees, self-employed businesspeople and employers, unemployed people who are available for work and those who contribute unpaid work in a family business. The inactive population consists of individuals who are not part of the labour force and are neither employed nor unemployed. This group includes young people in full-time education and without paid work, those who due to illness or other limitations are not available to the labour market or those who have exited the labour market due to age or other reasons.
Prior to 2015, this data was not register-based and was instead based on surveying a sample of the population aged 15-74. For this reason, figures up to 2014 are estimates. The unemployment figures in this survey are not directly comparable with other unemployment figures from Statistics Faroe Islands, which are based on records from the unemployment office (ALS) and the Social Affairs office.
Definitions:
- The Labour force is an international measurement which counts residents, employed and unemployed, aged 15-74, who are capable of work.
- Employed people are defined as those who are employees, on approved leave of absence or self-employed. They work for a wage, dividends or payment-in-kind.
- Unemployed people are defined as those without a job, actively seeking work and fully available to the job market within two weeks.
- The inactive population are individuals who are not part of the labour force and are neither employed nor unemployed.
- The activity rate is the labour force in % of the working-age population (15-74).