Educational mismatch rate for unemployed between 5.1% and 38.6%

Updated: 19 November 2020

Since the first quarter of 2003, the quarterly educational rate for unemployed has been between 5.1% and 38.6% (figure 1). In the end of 2007, the educational mismatch rate was at its highest level of 38.6% but in 2015 the rate was at its minimum of 5.1%. This indicates that in 2015, there was a minimum difference between the educational levels of those employed and those unemployed. The trend has been relatively stable between 15.7% and 18% since beginning of 2014. During the third quarter of 2020 the mismatch rate was 12.8% compared with 15.7% in the third quarter of 2019.

In the third quarter of 2020, the educational mismatch rate seems to be declining among unemployed males, 8.2% compared with 17.1% and 23.8% in the first and second quarter of 2020 (figure 2). The year before, or in the third quarter of 2019, the rate was 12.1%. The educational mismatch rate for unemployed females in the third quarter of 2020 was 20.2% compared with 19.6% in the third quarter of 2019.

The educational distribution of those unemployed aged 25-64 with compulsory education decreased from 50.7% in the first quarter of 2003 to 27.8% in the third quarter of 2020 (figure 3). During the same period, the proportion of unemployed with a tertiary education increased from 21.4% to 36.1% and the proportion of unemployed with upper-secondary education from 27.9% to 36.1%.

Caution must be taken when interpreting changes in the education level of unemployed, taking into account the education level of the population as the number of 25-64 year old with only compulsory education has decreased over the time period while the number with a tertiary education has increased.

Educational mismatch rate for those outside the labour force has increased since 2008

Individuals who do not meet the conditions for being considered employed or unemployed are considered to be outside the labour market. The educational mismatch rate between the employed and those outside the labour force reached a minimum in the second quarter of 2008 (15.6%) but increased until the end of 2019 (27.9%). This indicates that the composition of education has changed between the employed and those outside the labour force.

The educational mismatch rate between employed women and women outside the labour force has remained fairly stable since 2011 until the third quarter of 2020 when it was 29.6%. The rate is generally higher among females compared with males.

The educational distribution of 25-64 years old individuals outside the labour force with a compulsory education decreased from 51.2% in the first quarter of 2003 to 38.9% in the third quarter of 2020. During the same period, the distribution of persons outside the labour force with a tertiary education increased from 9.6% to 29.8% and the distribution of those with upper-secondary education went from 39.2% to 31.3% from 2003 to the third quarter of 2020.

Statistics

Educational mismatch rate by level of education of unemployed and persons outside the labour market 201119 (xlsx)

Metadata

Data used are quarterly data from Statistics Iceland’s Labour Force Survey (LFS) data, which provides information on people's jobs, working hours, and job search in accordance with Eurostat standards. The sampling frame for the Icelandic Labour Force Survey (IS-LFS) is drawn from all Icelandic and foreign citizens in the National Registry who are 16-74 years of age and domiciled in Iceland. LFS definitions of employed, unemployed and individuals outside the labor force were used.

Employed (persons in employment): Employed persons comprise persons aged 16 years and more who either a) worked for at least one hour for pay, profit or family gain during the reference week or b) who were not at work during the reference week but had a job or business from which they were temporarily absent.

Unemployed: Unemployed persons comprise persons aged 16 to 74 years who were either a) not employed according to the definition of employment above, b) currently available for work, i.e. were available for paid employment or self-employment before the end of the two weeks following the reference week, or c) were actively seeking work, i.e. had taken specific steps in the four week period ending with the reference week to seek paid employment or self-employment or who found a job to start later, i.e. within a period of at most three months from the end of the reference week.

Outside labour force: Individuals who do not meet the conditions for being considered employed or unemployed.

Educational attainment: The highest educational attainment was classified according to the ÍSMENNT2011 classification system which is based on ISCED2011. Educational levels were grouped into three groups: compulsory education (levels 1 2), upper-secondary education (levels 3-4) and tertiary education (levels 5-8).

Educational mismatch rate indicates the differences between the educational levels of two groups.

Educational mismatch rate for unemployed is calculated using this formula:

Educational mismatch rate for persons outside the labour force (OLF) is calculated using this formula: