Labour force
02. Feb 2024
Lowest unemployment rate in Europe
Unemployed people are those without jobs, who actively seek work and are ready to start work within 2 weeks.
This article uses figures from the internationally comparable labour force survey, conducted annually in November. The unemployment figures in this survey are not directly comparable with the monthly unemployment figures. The monthly figures are only based on records from the unemployment office (ALS) and the Social Affairs office, which only cover the 16-66 age group. The annual labour force survey, on the other hand, covers ages 15-74 and is based on government records and phone interviews with individual not registered as unemployed. The annual survey thus covers a larger share of the population, partly because it includes a wider age group and partly because it includes people not registered in the unemployment system.
To facilitate international comparisons, the annual labour force survey adheres to the International Labour Organization's (ILO) general guidelines, enabling direct comparisons between the Faroese figures and those from other nations. Consequently, the survey covers the 15-74 age group, as stipulated by these guidelines.
More unemployed men than women
Unemployment in the Faroes is now at the same level as in 2019, prior to the onset of the Covid pandemic. The unemployment rate has been declining since 2021.
Men’s unemployment rate has seen a slower decline than women’s. The rate for men stands at 1.7%, which is 0.6% higher than in 2019. The rate for women is 0.9%, 0.5% lower than in 2019. There are currently 304 men and 130 women registered as unemployed.
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Lowest unemployment in Europe
Of the countries featured in the graph below, Iceland is the only one that has had lower unemployment than the Faroes in recent years. The graph also reveals a general downward trend in unemployment, with a temporary interruption during the pandemic period.
Eurostat’s unemployment details for European countries are available here.
As Eurostat has not yet published its Q4 2023 activity rates for European countries, the latest Faroese figures are compared to Q4 2022 in the graph below.
Comparing the figures in this way is believed to be most appropriate considering the seasonal changes in labour forces. The 15-74 age group is used in internationally comparable labour force statistics.
The Faroe Islands have the lowest unemployment rate in Europe, at 1.3%. Spain and Greece have the highest rates, at 13% and 12%, respectively. Sweden and Finland are above the EU average, while the other Nordics are below. The Czech Republic has Europe’s second-lowest unemployment rate, at 2.2%.
Faroese unemployment is the lowest in Europe for both sexes. Faroese women have an exceptionally low rate, at 0.9% – a substantial 1.6% gap to the second-lowest rate for women (Iceland at 2.5%). The rate for Faroese men is 0.2% lower than in the Czech Republic.
Highest unemployment among young people
The Faroes have the lowest unemployment in Europe across all age groups. The 15-19 age group has the highest unemployment rate. Unemployment among 20-29-year-olds is notably lower in the Faroes compared to Denmark and the EU average. The second-largest age group in the Faroese labour force is the 60-64-year-olds, which has a 2.2% unemployment rate, not far from the Danish equivalent of 2.5%.
Eurostat’s comparable charts by age groups are available here.
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 that 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).