The role of subnational governments in adult skills systems: Iceland

This country note provides an overview of the governance of the adult skills system in Iceland. It is part of an extensive review of all 38 OECD countries. The main findings across all countries are summarised in the OECD policy paper The Role of Subnational Governments in Adult Skills Systems. Representatives from the Icelandic Government reviewed the country note in February 2025 and it was published in June 2025.

Table 1. Overall governance and expenditure structure

Governance structure	Levels of governance	% of general government expenditure at the sub-national level
Unitary	National: Íslenska ríkið Local: municipalities (sveitarfélög) (64)	29.1%
How is the adult skills system governed?
Centralised ✓	Combined system	Decentralised

Note: For more information on the definitions of the governance models, please see (OECD, 2025[1]).

Source: (OECD/UCLG, 2022[2])

How is the adult skills system governed?

Iceland has a centralised adult skills system, the national level of which has the primary responsibility based on legislation for Vocational Education and Training (VET), adult education (AE), and Active Labour Market Policies (ALMPs). Continuous Education and Training (CVT) and Lifelong Learning (LLE) are seen as more flexible parts of the system, often supported by collective labour market agreements. Schools and other adult education providers, often private, offer adult education for individuals with low skill levels or who need re- or upskilling opportunities. Services for individuals out of work or in rehabilitation are offered by the Public Employment Service (PES) on the local level.

Local government (municipalities) mainly provide adult education, especially for individuals with low skill levels and those furthest from the labour market:

• The VET system is steered by the Ministry of Education and Children’s Affairs (Mennta- og barnamálaráðuneytið), and programmes are delivered primarily by upper secondary schools operated by the Ministry. Since 2011, the VET system has become more decentralised, giving local schools more autonomy. Master’s programs in trades are taught in upper secondary schools, while universities and technical schools offer other higher-level VET education (HVET). The Ministry of Higher Education, Science and Innovation is responsible for HVET programmes.

• The adult education sector is closely connected to VET and other skills areas like CET (called CVT) and continued VET. The Ministry of Education and Children’s Affairs is responsible for implementing these policies in cooperation with social partners and educational providers, such as regional education and training centres and schools managed by municipalities or social partners. The Education and Training Service Centre (Fræðslumiðstöð atvinnulífsins), owned by the social partners, has a contract with the Ministry to coordinate and support LLE and AE.

• ALMPs are the responsibility of the Ministry of Social Affairs and Labour (Félags- og vinnumarkaðsráðuneytið) in cooperation with the Directorate of Labour (Vinnumálastofnun) and the Public Employment Service (PES) located in all regions in Iceland. The Directorate operates through a structure of deconcentrated local offices that cooperate with municipalities to deliver services for individuals out of work or who need assistance to enter the labour market due to, e.g. disabilities.

Table 2. Allocation of responsibilities across policy areas and levels of government

		Strategy	Intelligence	Implementation	Funding	Delivery
Policy area	National level
	VET, HVET	✓	✓	✓	✓	✓
	CET	✓	✓	✓	✓	✓
	AE	✓	✓	✓	✓	✓
	ALMP	✓	✓	✓	✓	✓
	Local level
	VET, HVET	-	-	-	-	-
	CET	-	-	-	-	-
	AE	-	-	-	-	✓
	ALMP	-	-	-	-	-

Legend: ✓ = Yes; - = No

Note: For more information on exact definitions of policy areas and responsibilities, please see (OECD, 2025[1]).

Infographic 1. Overview of the adult skills system

Note: Colour code: Dark blue → government/national/subnational agencies, Green → social partners, Lighter blue → private actors and education providers, Yellow → Expert councils/foundations/associations/research institutions. For more information, please see (OECD, 2025[1])

Source: OECD compilation based on available information.

Stakeholders and responsibilities at the national level

At the national level, responsibilities for adult skills policies are distributed across the following stakeholders:

• The Ministry of Education and Children’s Affairs and the Ministry of Higher Education, Science and Innovation are responsible for formulating VET, HVET, CET and AE policies. The former Ministry oversees the contractual operation of the Education and Training Centre (Fræðslumiðstöð atvinnulífsins), the Lifelong Learning Regional Centres and language schools.

• The Ministry of Social Affairs and Labour (Félags- og vinnumarkaðsráðuneytið) in cooperation with the Directorate of Labour (Vinnumálastofnun) is responsible for the design and strategic framework for ALMPs and training and career guidance for jobseekers.

• Social partners are engaged nationally in VET, CET, AE and ALMP provision. They use various means to do so, like through their membership of Occupational Councils (Starfsgreinaráð) supporting VET provision, co-ownership of the Education and Training Service Centre and by direct provision of CET, AE and ALMPs to their members. They are also responsible for several CVT funds to upskill and reskill competencies in working life.

Table 3. Stakeholders and responsibilities at the national level

Name of institution	Responsibilities					Organisation type	Areas	Description
	Strategy	Intelligence	Implementation	Funding	Delivery
The Ministry of Education and Children’s Affairs (Mennta- og barnamálaráðuneytið)	✓	✓	-	✓	-	Ministry	VET CET/ CVT AE	The Ministry is responsible for setting the overall educational policy framework that governs VET, CET, and AE. It oversees VET institutions and programmes, allocates funding to educational institutions, and develops AE policies, strategies and funding.
This Ministry of Higher Education, Science and Innovation (Háskóla-, iðnaðar- og nýsköpunarráðuneyti)						Ministry	HVET CET/ CVT	The Ministry sets the overall educational policy framework that governs HVET.
The Ministry of Social Affairs and Labour (Félags- og vinnumarkaðsráðuneytið)	✓	-	-	✓	-	Ministry	ALMP	The Ministry is responsible for designing and setting the strategic framework for ALMPs that support the unemployed and underemployed.
Directorate for Labour (Vinnumálastofnun)	-	✓	✓	✓	-	National Agency	ALMP	The Directorate operates under the Ministry of Social Affairs and Labour and is responsible for implementing ALMPs through a structure of deconcentrated offices. It provides job training programmes, employer subsidies, and other initiatives to enhance employability. It also facilitates job seekers' access to VET and AE programmes. The Directorate is also responsible for intelligence through analysis of labour market trends.
The Directorate of Education (Menntamálastofnun)	-	-	✓	-	-	National Agency	VET	The Directorate is responsible for providing educational material, conducting standardised tests, and, more generally, supervising the quality of the education system from primary to upper secondary schools, including VET schools.
The Education and Training Service Centre (Fræðslumiðstöð atvinnulífsins)	-	✓	✓	✓	-	Education provider	AE/LL CET/ CVT	The centre is owned by the Icelandic Confederation of Labour, the Confederation of Icelandic Employers, the Federation of State and Municipal Employees, the Ministry of Finance and Economic Affairs and the Association of Local Authorities. It is a coordinating body for AE in cooperation with 14 lifelong learning centres. It is responsible for writing curricula and supporting the development of guidance and counselling services for LLL and AE. The centre follows a service contract with the Ministry of Education and Children.
Occupational councils (atvinnugreinaráð)	✓	-	✓	-	-	Social partners	VET	The 12 councils advise the Ministry of Education and Children on upper secondary VET policies and programmes. Each council covers a specific occupational group and comprises representatives from the social partners, namely trade unions, employers’ associations, and professional associations.
Social partners (Federation of Iceland Industries, Confederation of Icelandic Employers, Icelandic Confederation of Labour)	-	-	✓	✓	✓	Social partners	VET CET/ CVT AE ALMP	The social partners are involved in implementing VET, CET and AE programmes. They support the alignment of VET provision with industry and labour market needs in close cooperation with VET schools and are direct providers of VE and CET programmes and ALMPs to their members. They offer grants to support career development and basic skills in working life through their CVT funds
Upper secondary schools (framhaldsskólar)					✓	Education provider	VET	The upper secondary schools are overseen by the Ministry of Education and Children’s Affairs and provide academic and vocational education for students aged 16+. They include gymnasiums, vocational schools and specialised training institutions.

Legend: ✓ = Yes; - = No

Source: (Cedefop; Directorate of Education, 2019[3]), (Lauringson and Lüske, 2021[4]), (frae.is, 2024[5]), (island.is, 2024[6]), (European Committee of the Regions, 2024[7]), (Vinnumála Stofnun, 2024[8]), (European Commission, 2023[9]), (Directorate of Labour, 2024[10]), (Efling, 2024[11]), (island.is, 2024[12])

Stakeholders and responsibilities at the local level

The local governance level in Iceland is composed of 64 municipalities. In addition to the municipalities, Lifelong Learning Centres, secondary schools, Local Employment Offices, and Local Labour Councils play a central role in the adult skills system:

• The municipalities have responsibilities in the areas of VET, CET, and AE, in particular through participation in boards and councils and the operation of local adult education or LLL centres. Municipalities tend to focus on developing basic skills in their provision for individuals within their constituency, often in co-operation with other stakeholders. While they do not have a statutory responsibility for ALMPs, many municipalities provide various types of employment for individuals out of work, often through their social service departments.

• Lifelong Learning Centres operate across the country to provide a wide range of educational programmes for adults (VET preparation, CET/CVT and AE/LLL). They have contracts with the Ministry of Education and Children’s Affairs and are otherwise funded in various ways including funding from the Education and Training Fund.

• Local Employment Offices are Iceland's direct providers of ALMPs. They are deconcentrated units operating under the Department for Labour's remit.

• The Local Labour Market Councils conduct research and analysis on the local labour market and skill situation. Their members are appointed by the Ministry of Education and Children’s Affairs and include representatives from social partners, municipalities and the Ministry.

Table 4. Stakeholders and responsibilities at the local level

Name of institution	Responsibilities					Organisation type	Areas	Description
	Strategy	Intelligence	Implementation	Funding	Delivery
Municipalities (sveitarfélög)	-	-	✓	✓	✓	Subnational government	CET/ CVT AE/LLL	Municipalities have a statutory responsibility to provide AE programmes (formal and non-formal) for inactive adults and integration programmes for immigrants and other marginalised groups. While not directly responsible for ALMP provision, municipalities often support the unemployed through their social services departments and in cooperation with local employment offices. Funding for their activities comes from a mix of national and local sources.
Lifelong Learning Centres (Fræðslumiðstöðvar)	-	-	✓	✓	✓	Education provider	CET/ CVT AE/LLL	Nine centres operate across the country (and two in Reykjavik) to provide a wide range of educational programmes aimed at adult learners covering VET, CET and AE). They serve as accessible hubs for community education, facilitating lifelong learning opportunities for individuals seeking to enhance their skills. The centres follow the guidelines and methodology developed by the Education and Training Service Centre when funded by the Educational and Training Fund. Municipalities, colleges and social partners support their operations, and they receive financial support from the Ministry of Education and Children.
Secondary schools for further education	-	-	-	-	✓	Education provider	VET	Secondary schools in Iceland offer two main educational pathways: general education and VET. The schools also offer adult CET courses, e.g. part-time re- and upskilling programmes. The schools are funded and managed by the Ministry of Education and Children.
Local Employment Offices (vinnumálastofnanir)	-	-	-	-	✓	National agency	ALMP	The Directorate of Labour operates local employment offices across Iceland, serving as the primary contact point for jobseekers. They provide various services, including job placement assistance, career counselling and information about training programmes.
Local labour market councils (atvinnumálanefndir)	-	✓	-	-	-	Expert council	ALMP	The councils aim to enhance cooperation among stakeholders involved in local labour market development. They seek to identify and address employment, skills development and economic growth challenges. Their members are appointed by the Minister of Education and Children’s Affairs and include representatives from social partners, municipalities and the Ministry.

Legend: ✓ = Yes; - = No

Sources: (European Commission, 2023[13]), (European Commission, 2023[14]), (Ministry of Welfare, 2006[15])

References

[3] Cedefop; Directorate of Education (2019), Vocational education and training in Europe: Iceland, https://www.cedefop.europa.eu/en/tools/vet-in-europe/systems/iceland-2019.

[10] Directorate of Labour (2024), Studying, courses and job related resources, https://vinnumalastofnun.is/en/counselling-and-services/studying-courses-and-job-related-resources/courses.

[11] Efling (2024), Efling union rep courses, https://efling.is/en/courses/efling-union-representatives-courses/.

[13] European Commission (2023), Administration and governance at local and/or institutional level, https://eurydice.eacea.ec.europa.eu/national-education-systems/iceland/administration-and-governance-local-andor-institutional-level.

[9] European Commission (2023), Adult education and training funding, https://eurydice.eacea.ec.europa.eu/national-education-systems/iceland/adult-education-and-training-funding.

[14] European Commission (2023), Lifelong Learning Strategy, https://eurydice.eacea.ec.europa.eu/national-education-systems/iceland/lifelong-learning-strategy.

[18] European Commission, Eurydice (2023), 8. Adult education and training, https://eurydice.eacea.ec.europa.eu/national-education-systems/netherlands/adult-education-and-training.

[7] European Committee of the Regions (2024), Iceland - Vocational Training, https://portal.cor.europa.eu/divisionpowers/Pages/Iceland-Vocational.aspx.

[5] frae.is (2024), The Education and Training Service Center (ETSC), https://frae.is/fraedslumidstodin/about-us/.

[16] Government of Iceland (2016), Adult Education Act, https://www.government.is/media/menntamalaraduneyti-media/media/frettatengt2016/Thyding-log-um-framhaldsfraedslu-november-2016.pdf.

[17] Government of Iceland (2013), Upper Secondary Education Act, https://www.government.is/media/menntamalaraduneyti-media/media/law-and-regulations/Upper-Secondary-Education-Act-No.-92-2008.pdf.

[12] island.is (2024), Directorate of Education, https://mms.is/directorate-education-0.

[6] island.is (2024), Lifelong learning, https://island.is/en/lifelong-learning.

[4] Lauringson, A. and M. Lüske (2021), “Institutional set-up of active labour market policy provision in OECD and EU countries: Organisational set-up, regulation and capacity”, OECD Social, Employment and Migration Working Papers, No. 262, OECD Publishing, Paris, https://doi.org/10.1787/9f2cbaa5-en.

[15] Ministry of Welfare (2006), Labour Market Measures Act, No. 55/2006, as amended by Act No. 88/2008, No. 162/2010, No. 126/2011, No. 85/2015, No. 88/2015 and No. 38/2018., https://www.government.is/library/04-Legislation/Labour%20Market%20Measures%20Act%2055%202006%20as%20amended%202018_.pdf.

[1] OECD (2025), “From national to local: Exploring the role of subnational governments in adult skills systems across OECD countries”, OECD Local Economic and Employment Development (LEED) Papers, No. 2025/XX, OECD Publishing, Paris.

[2] OECD/UCLG (2022), 2022 Country Profiles of the World Observatory on Subnational Government Finance and Investment., https://www.sng-wofi.org/country-profiles/iceland.html.

[8] Vinnumála Stofnun (2024), Vinnumála Stofnun, https://www.vinnumalastofnun.is/.

About the Local Employment and Economic Development Programme (LEED)

The OECD Local Economic and Employment Development (LEED) Programme Papers present innovative ideas and practical examples on how to boost local development and job creation. A wide range of topics are addressed, such as employment and skills; entrepreneurship; the social economy and social innovation; culture; and local capacity building, among others. The series highlights in particular policies to support disadvantaged places and people, such as the low skilled, the unemployed, migrants, youth and seniors.

About the Centre for Entrepreneurship, SMEs, Regions and Cities

The Centre helps local, regional and national governments unleash the potential of entrepreneurs and small and medium-sized enterprises, promote inclusive and sustainable regions and cities, boost local job creation and implement sound tourism policies. Find out more: www.oecd.org/cfe

This project was made possible by generous support from the JPMorganChase Foundation.

This work is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Member countries of the OECD.

This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.

The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

The views expressed in this report should not be taken to reflect the official position of the JPMorgan Chase Foundation, JPMorganChase or any of its affiliates.

The full paper is available in English: OECD (2025), The role of subnational governments in adult skills systems, OECD Local Economic and Employment Development (LEED) Papers, OECD Publishing, Paris, https://doi.org/10.1787/d452e8b7-en

© OECD 2025

Attribution 4.0 International (CC BY 4.0)

This work is made available under the Creative Commons Attribution 4.0 International licence. By using this work, you accept to be bound by the terms of this licence (https://creativecommons.org/licenses/by/4.0/).

Attribution – you must cite the work.

Translations – you must cite the original work, identify changes to the original and add the following text: In the event of any discrepancy between the original work and the translation, only the text of original work should be considered valid.

Adaptations – you must cite the original work and add the following text: This is an adaptation of an original work by the OECD. The opinions expressed and arguments employed in this adaptation should not be reported as representing the official views of the OECD or of its Member countries.

Third-party material – the licence does not apply to third-party material in the work. If using such material, you are responsible for obtaining permission from the third party and for any claims of infringement.

You must not use the OECD logo, visual identity or cover image without express permission or suggest the OECD endorses your use of the work.

Any dispute arising under this licence shall be settled by arbitration in accordance with the Permanent Court of Arbitration (PCA) Arbitration Rules 2012. The seat of arbitration shall be Paris (France). The number of arbitrators shall be one.