Skills forecast

Summary

Statistics Iceland conducts a long-term forecast on the development of labour supply and demand by education and industries. The forecast is published for the years 2025-2040 and is based on data on the number of individuals in the labour market and data on the number of hours worked. These data are used to train a statistical time series model, which is then used to predict labour supply and demand.

Description

The skills forecast is entirely data-driven and is thus fully dependent on the trends in the historical data used to train the time series model employed to estimate the forecast. The supply side of the forecast is based on data on the number of individuals in the labor market by education and age for the years 2006-2022, and the demand side of the forecast is based on data on the number of hours worked by industry and education for the years 2008-2022. The forecast includes published statistics for 36 education categories and 79 industries. In addition to the published statistics, the results will be published graphically by the end of summer 2024 to highlight the following:

(i) the comparison of labor supply and demand by education category,
(ii) the educational composition of industries,
(iii) the industry composition of the work performed by individuals with certain education.

In the graphical publication, focus will be laid on presenting the forecast together with historical data to increase interpretability. Further information on the methodology of the skills forecast can be found in the published metadata.

Objectives

The goal of the skills forecast is to highlight developments in the labor market regarding the education of the workforce. It specifically aims to shed light on the imbalances between the supply and demand of labor across different education categories.