Skills and Labour Market Integration of Immigrants and their Children in Iceland

2. Context of integration policy in Iceland

Abstract

This chapter presents the context for integration policy in Iceland. It begins with a profile of the immigrant population, mapping the historical context of migration in Iceland, migrants‘ origins and characteristics, their settlement and finally their descendants. It then proceeds with an overview of immigrants‘ socio‑economic outcomes in comparison with the native‑born population. It finishes with a discussion on the evolution of integration policy along with the key policy actors involved in shaping immigrants‘ integration outcomes in Iceland.

A short profile of the immigrant population

A brief history of immigration in Iceland

Immigration to Iceland has increased dramatically since the beginning of the twenty‑first century. The first census was conducted in 1703, although data on the foreign-born population was not collected until the 1855 census. Foreign-born individuals up until the 1940 census numbered around 1% of the Icelandic population, the majority of which were the children of Icelandic students abroad, notably in Denmark and other Scandinavian countries. In the 1950 census, immigrants accounted for 1.9% of the population.

In 1954 the Common Nordic Labour Market was created, allowing Nordic citizens to freely live and work in all the Nordic countries. Although Iceland was not originally a signatory, it acted in accordance with the agreement until it formally took effect in 1983. The agreement includes provisions on equal treatment in the labour market, co‑operation between public employment agencies, increased co‑operation between the countries‘ social partners, and the lifting of work permit requirements for Nordic citizens (Nordic Council of Ministers, 2019[1]; Pedersen, Røed and Wadensjö, 2008[2]). In 1966, Iceland joined the Nordic Passport Union, allowing citizens of the other four Nordic countries to freely travel to and reside in Iceland without travel documentation or a residence permit. The Scandinavian countries remained a primary source of immigration for most of the 20th century.

The Agreement on the European Economic Area (EEA) entered into force in 1994, enabling the extension of the European free mobility zone to three of the four European Free Trade Association (EFTA) – Iceland, Liechtenstein and Norway. The changes to freedom of movement brought about by the signature of the agreement contributed to the strong growth of the foreign-born population over the next decades (Figure 2.1).

Figure 2.1. The migrant population has grown rapidly since the turn of the century

Share of foreign-born as a percentage of the total population, 1996‑2023

Source: Statistics Iceland.

Initially, the signature of the EEA Agreement had little effect on migration inflows, as the Icelandic labour market faced a period of relatively high unemployment. The years 2000‑01 saw a rise in immigration due to high demand in the labour-intensive construction sector. The increase in immigration came not only from EEA countries but also Poland – at the time not a member of the EU and thus neither the EEA – Thailand and the Philippines. Among EEA countries, immigrants arrived primarily from Germany, and to some extent from the United Kingdom and France.

Following EU enlargement to Central and Eastern Europe in 2004 and 2007, and strong economic growth in the 2000s – with GDP growth averaging an annual 4.6% from 2000 to 2008 – migration inflows rose sharply (Figure 2.2). Initially, Iceland had imposed transitional restrictions on the free movement of workers from the new EU member states, but due inter alia to high demand for labour in the construction sector, the exception was annulled in 2005. Migrant arrivals in the period peaked in 2007 with 8 300 arrivals.

Figure 2.2. Migrant arrivals reached a record high in 2022

Immigrant arrivals per year, 1995‑2022

Note: Migration is assessed on the basis of information on changes in legal domicile in the National Registry’s Population Register. Migrations are counted on the basis of the date of registration in the National Registry, but not according to when the migration took place. There may be some delay in the registration of persons with foreign citizenship who receive a residence permit.

Source: OECD Secretariat calculations based on Statistics Iceland (2023[3]), MAN43001: Immigrants by sex, country of birth and year of arrival 1996‑2022, https://px.hagstofa.is/pxen/pxweb/en/Ibuar/Ibuar__mannfjoldi__3_bakgrunnur__Uppruni/MAN43001.px.

In addition to the increase in absolute numbers of migrants, their composition changed substantially in the mid‑2000s as a result of the EU‘s Central and Eastern European expansion. Whereas migrants coming from Europe had accounted for two‑thirds of new arrivals in 2000, their share had jumped to 91% in 2007. By contrast, the share of migrants coming from Asia had decreased from one-fifth of all arrivals in 2000 to 4% in 2007 (Figure 2.3). Moreover, while men accounted for 47% of new arrivals in 2000, this share had risen to 54% in 2007. Men accounted for 54% of European migrants in the high migration period of 2005‑08 – with a peak of 61% in 2007 – whereas the share was 39% for Asian immigrants in the period (Statistics Iceland, 2023[3]). The differences in gender composition can be explained by the high numbers of labour migrants coming from Europe, among which men are overrepresented, whereas family migration was the most populous category of arrivals coming from Asia, where women are concentrated.

Figure 2.3. Europeans account for the overwhelming majority of immigrants

Composition of immigrant arrivals per year by region of origin, 1995‑2022

Note: “Other” includes Africa, North, Central and South America, and Oceania.

Source: OECD Secretariat calculations based on Statistics Iceland (2023[3]), MAN43001: Immigrants by sex, country of birth and year of arrival 1996‑2022, https://px.hagstofa.is/pxen/pxweb/en/Ibuar/Ibuar__mannfjoldi__3_bakgrunnur__Uppruni/MAN43001.px.

In the years following the high point of 2007, immigration decreased sharply due to the global economic crisis of 2008‑11 which hit Iceland particularly hard. The collapse of Iceland‘s three largest banks in 2008 precipitated a deep financial and economic crisis. The national currency, the Icelandic króna (ISK) depreciated in value by around 50% in nominal terms over the course of 2008 (Darvas, 2012[4]; Guðmundsson, 2013[5]). It took until 2016 for GDP and economic output to recover to 2007 levels – coinciding with an uptick in immigration levels.

Immigration started rising again in 2012 with the economy recovering following the crisis. A key component in the economic recovery was a market-induced rise in the tourism sector, which accounted for 3.5% of Iceland‘s GDP in 2009, rising to 8.2% in 2016 (OECD, 2023[6]). Tourism had not been competitive in the decades prior to the financial crisis, inter alia due to high inflation and the overvaluation of the national currency. The sector‘s rise was however aided by the depreciation of the króna during the financial crisis (Gylfason and Zoega, 2019[7]). The rapid expansion of the tourism industry gave rise to considerable labour migration, with employment in tourism more than doubling from 2008 to 2019 and foreigners accounting for more than a third of all employees in the sector (Júlíusdóttir and Halldórsdóttir, 2020[8]). International visitors to the country peaked in 2017 and 2018 (Icelandic Tourist Board, 2023[9]). With the lowest unemployment rate (2.7%) since the onset of the financial crisis, the high demand for low-skilled labour as a result of the tourist boom was partly met with foreign workers. Growth in the construction sector was another source of demand for migrant workers, as the annual increase in the housing stock counted 2 737 units in 2017, compared to an average of 668 in the years 2009‑16 (Icelandic Confederation of Labour, 2022[10]).

The large arrival of humanitarian flows to Europe in 2015‑16 saw increased numbers of applications for international protection in Iceland. From 2003 (the earliest year on record) to 2014, the Directorate of Immigration received 106 applications for international protection per year on average. From 2015‑22, the number had risen to an average of 1 427, with a record-high number of 4 571 in 2022 (Figure 2.4). The rapid rise in recent applications can be explained by an upsurge in applications from Ukraine and Venezuela, which in 2022 comprised 30% of total net immigration. Unlike in most European countries, Ukrainian applications for temporary protection are included in statistics on international protection in Iceland (Box 2.1). Yet, excluding applications from Ukraine, Iceland remains the country with the second most asylum applications per million inhabitants among European OECD countries in 2022, at 5 794 – surpassed only by Austria (11 792). However, Venezuelan arrivals have started to decrease again over the course of 2023.

Figure 2.4. Applications for international protection reached a record high in 2022

Total asylum applications by year, 2013‑22

Note: In contrast to national statistics, nationals from Ukraine are not included in the asylum data here.

Source: Statistics Iceland; and the Directorate of Immigration (2024[11]), Tölfræði verndarsviðs, https://island.is/s/utlendingastofnun/toelfraedi.

Box 2.1. Data on applications for international protection in Iceland

Several institutions are involved in the data collection process for applications for international protection. These include the Directorate of Immigration, the National Commissioner of the Icelandic Police, the Directorate of Labour, and Statistics Iceland. A process is ongoing to improve data flows and delays in information provision between the institutions.

Virtually all European OECD countries differentiate between applications for temporary protection on the one hand, and applications for international protection on the other. Iceland, however, does not make this distinction, which leads to a distortion in the asylum statistics for Iceland. In 2022, over 4 million Ukrainians were granted temporary protection in European countries, while only 22 055 Ukrainians applied for international protection.

Figure 2.5 shows the number of applications per million inhabitants, with and without Ukrainian applications for international protection. Iceland’s number is halved when Ukrainian applications are taken out of the equation. As a result, aggregate data on applications for international protection in Iceland may be distorted when compared with other European countries.

Figure 2.5. Statistics on international protection in Iceland

New applications for international protection in European OECD countries, 2022

Source: OECD Secretariat calculations based on data from Eurostat.

In addition to those entering Iceland to apply for asylum, Iceland has since 1956 received refugees for resettlement on an ad hoc basis, without a firm annual quota as in other Nordic countries. In 2007, the government announced an annual quota of 25‑30 refugees, but the policy was abandoned as a result of the financial crisis and quota refugee arrivals were sporadic in the following years. In 2015, the government announced that the quota would be substantially increased due to the increase in refugee flows around the world, and an average of 50 refugees have been resettled in Iceland since 2016 (Government of Iceland, 2023[12]).

Origin and characteristics of Iceland‘s immigrant population

The migrant population has grown rapidly in the past decade

In the decade from 2011 to 2021, the share of the foreign-born population nearly doubled in Iceland (Figure 2.6). This is the highest increase in the population share of foreign-born among all OECD countries (OECD, 2022[13]). A further 1.7% of the total population in 2021 were born in Iceland to two foreign-born parents. This is a small share in international comparison, reflecting the recent nature of most immigration to Iceland.

Figure 2.6. Iceland has seen a rapid rise in the share of its foreign-born population in recent years

The share of foreign-born individuals among the total population, 2011 and 2021

Note: Data is sourced from labour force surveys, explaining the slightly different shares to those reported in Icelandic register data.

Source: OECD/European Commission (2023[14]), Indicators of Immigrant Integration 2023: Settling In, https://doi.org/10.1787/1d5020a6-en.

In 2022, a quarter of the immigrant population had lived in Iceland for 3‑5 years, and more than 70% of the immigrant population had not been in Iceland for more than ten years (Statistics Iceland, 2022[15]). This is in stark contrast to developments across the OECD, where on average 70% of the immigrant population has resided in the host country for more than ten years (OECD, 2022[16]). The high share of recent migrants reflects both the large inflows of migrants in recent years, especially in times of economic expansion, as well as a high prevalence of temporary work among immigrants. The high share of temporary workers among the immigrant population in Iceland has made it difficult to estimate their true prevalence in labour force surveys, although new methods adopted have improved the accuracy of estimates (Box 2.2).

Box 2.2. Immigrants tend to be underestimated in Iceland’s labour force survey

Statistics Iceland’s Labour Force Survey (LFS) has been conducted annually since 1991 and is intended to collect indicators on the labour market status of the Icelandic population, including its participation, employment, and unemployment rates, and working hours. 4 000 individuals participate annually, and each participant is contacted five times during an 18‑month period.

Immigrants are less likely be included in the survey for several reasons. First, to be included in the sample individuals must have permanent residence in the country and be registered in the civil registry. Second, the survey is conducted via telephone. As a result, the foreign-born population – notably EEA migrants working temporarily through foreign service providers and temporary work agencies – is likely to be underestimated.

Starting in 2021, new methods for the processing of results for the LFS were introduced. To reduce the nonresponse bias, changes were made to the weights of the survey and the estimated population size. Preliminary results from sectors with high immigrant concentration show that the number of employees reported in the national registry and in the LFS data have somewhat converged since then (Figure 2.7).

Figure 2.7. Adjustments made to LFS calculations in 2021 have improved data on immigrants’ labour market status

Number of employed persons by main activity in selected migrant-concentrated sectors, 2016‑22

Note: For more information on the new processing methods for the LFS, see Statistics Iceland (2021), “Improvements in the processing of the Icelandic Labour Force Survey”, www.statice.is/publications/publication/labour-market/improvements-in-the‑processing-of-the‑icelandic-labour-force‑survey/.

Source: Statistics Iceland (2023); Icelandic Confederation of Labour (2019[17]), Íslenskur vinnumarkaður 2019, www.asi.is/media/315797/islenskur_vinnumarkadur_2019_brotastarfsemi_130819_2.pdf.

Around half of migrants wish to settle down permanently

When assessing the need to invest in integration policies, it is important to consider the extent to which migrants stay in the country for good. Administrative data show that in 2023, a majority (43 000 of 71 000) of migrants in the country were recent arrivals (arriving in the country within the last five years). The large share of recent arrivals makes estimating the extent to which migrant groups wish to settle in the country a particularly important task in the Icelandic context.

A cohort analysis of migrants who arrived in 2012 suggests that migrants in Iceland tend to remain in the country longer than in other European countries, with a few exceptions. Looking only at EEA migrants, 60% of migrants remained in the country after three years of stay, and 51% remained after five years in the country (Figure 2.8). Non-EEA migrants were less likely to stay, with 46% remaining in the country after three years and 41% after five years. Given the different profiles of non-EEA migrants who arrived in 2012 and those who are arriving a decade later, it is plausible that these rates may look different among more recent cohorts.

Figure 2.8. EEA migrants stay in the country for longer than in most European countries

Retention rates for EEA migrants in selected European countries, population aged 15 and over

Note: The retention rate is defined as the share of individuals who have stayed in the country since a given year. For Iceland, a register-based analysis of the cohort of migrants who arrived in 2012 was used. An individual is deemed to be in the country if one of the following applies: they are in employment, in the unemployment register, receiving social security benefits, or receiving social assistance from municipalities. If none of the above applies, the individual is considered to have left the country. For other countries, EU-LFS and OECD International Migration Database data was used, following cohorts of migrants who arrived in 2010‑14.

Source: Iceland: Statistics Iceland. Other countries: EU-LFS and OECD International Migration Database.

Another way to estimate stay rates is surveying stay intentions, sourced from the Workers in Iceland 2024 survey (see Box 2.3). While not as representative as register data, these data allow for disaggregation by reason for migration. Humanitarian migrants overwhelmingly desire to stay permanently in Iceland, followed by those who came for family reasons (largely from the EEA). Labour migrants, who account for the bulk of migrants in Iceland, exhibit diverging intentions, with roughly a three‑way split between staying temporarily, permanently, and being undecided (counting only recent arrivals). Stay intentions are, not surprisingly, lower among recent arrivals than those that have stayed for five years or longer in Iceland. However, considering only those who have decided their length of stay among recent arrivals, six in ten plan to stay permanently. Even among recent migrants from the EEA who arrived for labour and who have a view about their stay intentions, about half plan to stay for good.

Box 2.3. Research and data sources on integration in Iceland

Data and research on migrant integration in Iceland is limited and remains in early stages. A body of qualitative research – mostly on living experiences of Polish migrants – exists, while quantitative data and studies are sparse. There are important exceptions, notably several studies on inequality and discrimination.

Iceland, much like the other Nordic countries, operates a system of linked administrative registers, which in theory allow for following the integration process of immigrants and their children over time. Every resident in Iceland has a Personal Identification Number (kennitala), through which the person’s education, employment and participation in the labour market are registered in the central Registers Iceland (Þjóðskrá) database. In practice, however, basic variables relevant to integration are often absent from public data, such as place of birth or reason for migration.

For international comparisons, European labour force and household surveys have been used throughout the report, notably the European Labour Force Survey (EU-LFS). This too, is very limited in Iceland. In 2021, Eurostat added a set of questions to the core EU-LFS on migrant integration, which Iceland did not participate in. Furthermore, Iceland is the only EU-LFS participating country, along with Switzerland, which does not record questions on the number of children in the household, hampering the labour market situation of migrant (and non-migrant) mothers, a group at risk of labour market exclusion. Iceland also participates in the Survey on Income and Living Conditions (EU-SILC), an important source on distributional questions and non-labour market indicators, but has not released microdata to Eurostat since 2018.

Workers in Iceland 2024 survey module on migrant integration

To account for the absence of data relevant to integration, the OECD entered into co‑operation with Varða, an Icelandic labour market research institute, adding a range of questions related to integration to their annual survey of employed and unemployed. Varða is owned by the Icelandic labour unions, and their survey has a wide reach given the uniquely high share of labour union members in the country (92% of all employed). The survey reached over two‑thirds of the Icelandic labour force, with more than 21 000 responses – a quarter of which were migrants. In Iceland, unemployed tend to be union members as well, so this group is included but the share of the unemployed in the survey (1.1% for the native‑born and 2.8% for the foreign-born) is well below that reported in the labour force survey (3.1% for the native‑born and 8.3% for the foreign-born).

There are also some sectoral biases, as members of the Icelandic Confederation of University Graduates (Bandalag Háskólamanna) and the Icelandic Teachers’ Union (Kennarasamband Íslands) did not participate in the survey. While these unions have small shares of foreign-born members it is evident that the survey is not fully representative of those in employment.

Another key shortcoming of the survey is its lack of information on country of origin. Only immigrants from Poland (the largest group among immigrants from the EEA) are separately identified. However, given the large share of immigrants from the EEA, the overwhelming percentage (around 90%) of immigrants who reported to have arrived for work and family purposes are from the EEA.

These limitations notwithstanding, the survey provides insights into key questions on migrant integration that are not available otherwise. For integration outcomes, such as language proficiency, discrimination, as well as their links with category of entry, the survey is the only currently available source and thus used throughout this report.

Several factors other than reason for migration influence migrants‘ length of stay in a host country. In Iceland, young people below the age of 30 are less likely to report the desire to stay permanently than older migrants – being a young person is associated with a decrease in the likelihood of wanting to stay permanently by 20 percentage points. In contrast, being in a relationship has a positive, although statistically insignificant, relationship with wanting to stay in the country.

Factors pertaining to skills and the labour market have the largest influence on whether or not migrants want to settle down. Highly educated migrants are less likely to desire to stay permanently than their low- and medium-educated peers. Against this backdrop, it is interesting to note that Iceland ranks sixteenth – last among Nordic countries – among arrivals destinations for highly skilled migrants in the OECD‘s Indicators of Talent Attractiveness 2023, a ranking of the OECD‘s 38 member countries in terms of migration policy frameworks and other factors that affect the ability to attract and retain international talent (OECD, 2023[18]). However, a recent revision of the Foreign Nationals Act aims to make Iceland a more attractive destination for highly skilled migrants, inter alia through facilitations for specialist and student residence permits (Althing, 2023[19]).

The migrant population is predominantly from the EEA, in spite of some increase in non-EEA arrivals

The native‑ and foreign-born populations differ widely in terms of age composition. The native‑born population is significantly older than the foreign-born population. Only 6% of immigrants are above the age of 60, compared with more than one in five among the native‑born population. Moreover, 87% of immigrants are working-age (between 15‑64 years old), whereas the figure is slightly above 60% for the native‑born population (Figure 2.9). The high number of immigrants of working age exceeds both the EU and OECD averages, at 78% and 80%, respectively. Among the Nordic countries, only Finland has a higher share of immigrants in working age.

Figure 2.9. Immigrants are overrepresented among the working age population

Immigrants and native‑born, distribution by age group, 2022

Note: The working age population is defined as individuals between the ages of 15 and 64.

Source: OECD Secretariat calculations based on Statistics Iceland (2022[20]), MAN43000: Population by origin, sex and age 1996‑2022, https://px.hagstofa.is/pxen/pxweb/en/Ibuar/Ibuar__mannfjoldi__3_bakgrunnur__Uppruni/MAN43000.px.

Iceland‘s foreign-born population is relatively homogenous in terms of origin, with a large majority coming from EEA countries. However, the share of non-EEA migrants has risen over the past decade – doubling in absolute terms between 2010 and 2020 (from 5 476 to 11 413). In 2022, three‑in-four immigrants in Iceland were born in Europe – including non-EEA countries – and 13% were born in Asia. No other continent of origin exceeded 5% of the immigrant population.

In 2022, 28.6% of the foreign-born in Iceland were born in Poland, accounting for 5.6% of Iceland‘s total population. Lithuania is a distant second among origin countries with 5.6%, followed by Romania (4.1%) and Latvia (3.7%). Among non-EEA countries, the Philippines (3.9%, the United Kingdom (2.1%) and the United States (2.1%) are the most prominent.

The composition of permanent migrants by reason for migration has changed in the last decade, notably due to increased inflows of humanitarian migrants (Figure 2.10). As mentioned, Iceland has received applications for asylum relative to its population well above the EU average in 2022. Aside from 2022, family-related migration has the predominant reason for non-EEA migration, although its share in the composition of inflows has decreased over the past decade. Labour migration remains low, as most labour needs are filled by migrants from the EEA.

Figure 2.10. A rise in humanitarian migrants has changed the composition of non-EEA migrant inflows

New residence permits by category, 2012‑22

Note: New residence permits granted for three months or more. Permits granted more than six months after a previous permit expired also count as a new permit.

Source: Statistics Iceland (2023[21]), MAN45003: New residence permits by type, citizenship and sex 2012‑22, https://px.hagstofa.is/pxen/pxweb/en/Ibuar/Ibuar__mannfjoldi__3_bakgrunnur__Vernd_dvalarleyfi/MAN45003.px.

As mentioned, a total of 4 518 applications for international protection were recorded by the Directorate of Immigration in 2022, slightly more than half of which (2 345) came from Ukraine. Not considering Ukraine, the number of asylum seekers was the highest on record (2 173), almost twice as much as the previous record year of applications for international protection (1 131 in 2016. The vast majority came from Venezuela. Applications for asylum, not considering Ukraine, continued to further increase in 2023, counting 2 317 applications in the year. Half of all applications, or 1 149, came from Venezuela. Palestine (13%), Nigeria (6%) and Somalia (5%) were other prominent origin countries.

This recent rise in arrivals of humanitarian migrants has important implications for integration. Whereas immigrants have for most of the twentieth century been a relatively homogenous group consisting for the most part of intra-EEA labour migrants, this is changing with major inflows of non-EEA humanitarian migrants – a group whose integration needs are entirely different.

The settlement of immigrants in Iceland

While immigrants reside all over Iceland, they are concentrated in the southwestern area of the country, and to some extent, the northwest (Figure 2.11). The southwestern area is home to the capital city, Reykjavík, and its metropolitan area. Around 63% of the total population lived in the capital area in 2022, 18.2% of which were immigrants, making it the region with the largest absolute number of immigrants. The largest share of immigrants is in the Suðurnes region. Immigrants made up 28% of the region‘s population in 2022, up from 9.5% in 2012 – the largest increase of any region during the period. Fishing is an important industry in the region, where foreign-born workers are disproportionately represented. The region is also home to Keflavík Airport, the country‘s main hub for international transportation, which plays an important role in the local economy. In the northwest Vestfirðir (Westfjords) region, immigrants make up the second highest proportion of migrants among the total population (22.3%) (Statistics Iceland, 2023[22]).

Figure 2.11. Immigrants represent a large share of the population in southwest and northwest Iceland

The share of foreign-born of the total population by geographical region, 2022

Source: Statistics Iceland (2023[23]), Innflytjendur 16.3% íbúa landsins, https://hagstofa.is/utgafur/frettasafn/mannfjoldi/mannfjoldi-eftir-bakgrunni-2022/.

Social and labour market context of integration policy

Employment and participation rates in Iceland are very high, with slight differences between the native‑ and the foreign-born populations

Iceland has a high skill labour market and its Nordic welfare model is dependent on high employment of both genders (OECD, 2022[16]). Iceland performs well on the main labour market indicators and differences between the native‑ and foreign-born are smaller than elsewhere in the OECD. In 2022, Iceland had the highest employment rate of immigrants among OECD countries, at 82.9% (Figure 2.12). The figure was slightly higher for the native‑born, at 83.3%, although the difference was more pronounced in other European OECD countries. Iceland also exhibits the highest participation rate of foreign-born persons among OECD countries, at 88.8%. In fact, migrant participation in the labour market is significantly higher than for the native‑born, at 86.2%.

Figure 2.12. Employment and participation rates in Iceland are the highest in the OECD

Employment (top) and participation (bottom) rates in OECD countries, 15‑ to 64‑year‑olds, 2022

Source: OECD data.

Another salient characteristic is the high employment of immigrants from non-EEA countries. Elsewhere in OECD Europe, intra-EEA migrants exhibit significantly higher employment rates than their peers migrating from outside the EEA – a difference of 11 percentage points. In Iceland however, non-EEA migrants also exhibit high employment rates, only slightly lower – 3 percentage points – than that of their EEA-born peers.

Iceland‘s high labour force participation has contributed to its status as one of the most egalitarian economies of the OECD (OECD, 2021[24]). Yet, gender gaps do exist, irregardless of place of birth, but in contrast to other OECD countries, the gender gap is much smaller – especially for the foreign-born. In 2022, participation rates of foreign-born women were 6 percentage points lower than those of their male counterparts. Among the native‑born, the gap was 5 percentage points. These gaps are significantly lower than the EU average (17 and 9 percentage points, respectively).

The COVID‑19 pandemic highlighted the precarious labour market situations of many immigrants

While participation rates indicate favourable labour market outcomes for immigrants, the same cannot be said about unemployment indicators. In April 2024, 55% of all unemployed individuals were foreign-born.

What is more, in periods of rising unemployment, increases tend to be significantly higher for migrants than the native‑born population. In the COVID‑19 pandemic, immigrants experienced a sharp increase in unemployment rates between Q3 2019 and Q3 2021 – rising by around 2 percentage points compared with the OECD average of less than 1 percentage point. In the same period, the unemployment rate of the native‑born population stood almost unchanged (Figure 2.13). This is due to the fact that immigrants are overrepresented in labour-intensive sectors that are adversely affected by economic shocks; such as tourism, construction and fisheries.

Figure 2.13. During the pandemic, immigrants fared much worse on the labour market than the native‑born population

Change in the unemployment rate in selected OECD countries, Q3 2019 to Q3 2021

Source: OECD/European Commission (2023[14]), Indicators of Immigrant Integration 2023: Settling In, https://doi.org/10.1787/1d5020a6-en.

Immigrants in Iceland struggle to find jobs that match their skill level

Iceland has a high-skill labour market, with only 5% of jobs classified as low-skilled – among the lowest shares in the OECD. Immigrants in Iceland are more educated than immigrants in other European countries on average, but are less educated than their native‑born peers (Figure 2.14). Immigrant women exhibit higher levels of educational attainment than their male counterparts, partly reflecting the high number of immigrant men arriving from Europe to work in medium- or low-skilled professions.

Figure 2.14. Immigrants have slightly lower levels of formal education than the native‑born

Highest level of educational attainment, by place of birth and gender, 2022

Source: Statistics Iceland.

One key issue is the fact that 35% of highly educated migrants in employment are formally overqualified – defined as the share of highly educated people working in low- or medium-skilled employment – whereas that share is 10% for the native‑born population. This is the largest gap among all OECD countries (see Chapter 3). Indeed, immigrants are overrepresented in three labour-intensive sectors of importance to the Icelandic economy: tourism, construction, and fisheries. Immigrants account for more than a third of all workers in these three sectors which together amounted almost 20%1 of Iceland’s GDP in 2022. Since the financial crisis, immigrants’ share of the workers in these sectors has been growing at a faster rate than migrants’ participation in the overall economy, reaching their highest levels in the most recent year for which data is available (2022). The skill levels that these sectors require vary, although they generally require lower skills than other sectors of the economy. Immigrants also take up a large proportion of the low-skilled jobs in these sectors despite holding similar skill levels to that of the native‑born population. For instance, in tourism, 76% of workers in catering and accommodation are foreign-born.

Lack of access to suitable housing can be an impediment to migrant integration

Iceland is a highly egalitarian economy. Its Gini coefficient has improved substantially in the past decade and a half, from a high of 31.8 at the onset of the financial crisis in 2008 to 23.4 in 2018, trailing only the Slovak Republic and Slovenia among European OECD countries. Moreover, socio‑economic status has a weaker influence on education or health outcomes in Iceland than in most OECD countries (OECD, 2021[24]).

While the relative poverty rate – defined as the share of the population living below the poverty line – in Iceland is lower than in most OECD countries, the picture is not as favourable when disaggregated by place of birth (Figure 2.15). The gap in poverty rates between the native‑ and foreign-born populations (7 percentage points) is wider than in the other Nordic countries, bar Sweden. A similar gap between native‑ and foreign-born can be seen in per capita levels of public expenditure, with striking differences for health-related benefits, in particular (Box 3.4). However, the relative poverty rates of immigrants in Iceland have made strides towards convergence with those of the native‑born population over the past decade, exhibiting the third highest reduction in rates since 2010 among OECD countries.

Figure 2.15. The poverty gap between the native‑ and foreign-born in Iceland is relatively large

Relative poverty rate by place of birth, 16+, 2020

Note: Rates have been adjusted using the Oaxaca-Blinder decomposition method, namely by controlling for age, gender, level of education and degree of urbanisation.

Source: OECD/European Commission (2023[14]), Indicators of Immigrant Integration 2023: Settling In, https://doi.org/10.1787/1d5020a6-en.

Box 2.4. Public expenditure on benefits varies between migrants and the native‑born

An interesting fact in Iceland is that per capita expenditure on public benefits is twice as high among the native‑born than among the foreign-born (Figure 2.16). This is well above differences observed in other OECD countries (OECD, 2022[16]).

The differences in Iceland seem to be largely driven by lower expenditure for migrants on health-related benefits. Migrants may face additional barriers when seeking health services in a new country. These barriers include language difficulties, health literacy, cultural differences, and the attitude of health professionals. In the Icelandic context, migrant mothers that do not speak the Icelandic language are a group that is particularly prone to receiving unsatisfactory health services. For instance, a recent study found that migrant women in Iceland face increased risks of urgent caesarean sections relative to native‑born women, suggesting that language barriers or inadequate antenatal care may be at play (Department of Anesthesia and Intensive Care, Landspítali University Hospital, Faculty of Medicine, University of Iceland et al., 2024[25]).

Figure 2.16. Differences in social expenditure are driven by health-related benefits

Benefit expenditure per inhabitant aged 18‑66, in ISK current prices, 2019‑22

Note: Health-related benefits include health insurance payments and disability benefits. Family benefits include child support and family/children-related allowances. Social assistance includes housing allowances, old-age pensions and municipal transfers and aid.

Source: Statistics Iceland.

Living conditions and the availability of adequate housing can influence the extent to which immigrants integrate into the host society. In Iceland, immigrants fare worse than the native‑born when it comes to living conditions, although outcomes are still more favourable than those in most other OECD countries. A tight rental market disproportionately affects immigrants, who account for 35% of renters and just over 10% of homeowners on the market. Around 15% of immigrants live in overcrowded dwellings and 25% in substandard housing, whereas the shares are 6% and 20% for the native‑born (OECD/European Commission, 2023[14]). These outcomes reflect a dire housing market that was affected by a dual rise in tourism and immigration over the past decade. At the same time, a particularly small number of housing units were built during the financial crisis, leading to high increases in prices (Icelandic Confederation of Labour, 2022[10]).

As immigrants are overrepresented on the rental market, they are more likely to incur burdensome housing costs (Statistics Iceland, 2019[26]; IMF, 2022[27]). Indeed, in the Workers in Iceland 2024 survey, more than half (54%) of immigrants reported housing costs as imposing a high burden on their finances, compared to 27% of the native‑born population. While immigrants‘ concentration on the rental market could explain these numbers – a quarter of migrants are houseowners compared with three‑quarters of the native‑born – they also reflect a housing support system which does not seem to target well those who most need it. 20% of households in the third income quintile receive housing allowances, a much higher share than the OECD average, at 5%. As in other European OECD countries, immigrant households are concentrated in the lower quintiles but to a lesser degree than elsewhere, with 40% in the two lowest quintiles, while the number is 32% for the native‑born. In spite of this, survey results indicate that the native‑born are more than twice as likely as the foreign-born to be receiving housing allowances (28% against 13%) (Varða, 2024[28]).2 Furthermore, a limited body of research suggests that migrants in Iceland may be prone to discrimination on the rental market, with detrimental effects for their integration prospects – further analysed in Chapter 4.

Despite challenges on the housing market, migrant outcomes improve as their length of stay increases. In total, a quarter of the foreign-born on the Icelandic labour market are homeowners, compared to nearly three‑quarters of the native‑born.3 Disaggregation by length of stay in the country shows that as expected, migrants’ share of homeowners rises with length of stay, rising to 36% among those who have stayed for five years or more, and up to 54% among those who have stayed at least ten years. Native‑born individuals to foreign-born parents exhibit ownership rates of 55%, still noticeably lower than those of their peers without foreign-born parentage.

Research on residential segregation in Reykjavík indicates that Polish immigrants in the city experience relatively low to moderate levels of residential segregation (Stefánsson, 2023[29]). As years of stay increase and their financial situation improves, along with their integration prospects, Polish immigrants become less bound by the housing market to live in low-income neighbourhoods, and they become more likely to be able to buy housing instead of renting.

The evolution of integration policy

Integration developed late and was initially limited to refugee policy

Iceland has accepted quota refugees since 1956 but lacked an integration policy for this group until 1995. The Icelandic Refugee Council was created in 1995 by the Ministry of Social Affairs. The council‘s objective was to formulate non-binding recommendations as to how many refugees Iceland would receive on an annual basis, and what financial contributions were needed to accommodate the refugee population and integrate them into society. The council was composed of representatives from relevant ministries and the Icelandic Red Cross, which has long been an important player in service provision for refugees in Iceland. While Iceland had received groups of refugees only on six separate occasions from 1956‑95, refugee group arrivals have increased since the establishment of the Refugee Council and refugee groups have been accepted on an almost annual basis since then. In 2005, the Refugee Council was abolished and replaced by a Refugee Committee whose role was more in line with other developments in the field of migrant integration, providing integration policy recommendations to the minister as opposed to merely suggesting how many quota refugees to accept (Ministry of Social Affairs and Labour, 2005[30]).

The turn of the century saw a growing need for a broader integration policy

Migrant integration became an increasingly prevalent topic in public debate around the turn of the century due to increased numbers of migrants coming to Iceland. The first nationwide efforts towards immigrant integration came in 2000, when a bill was passed in Parliament to establish the Multicultural Information Centre. Located in Ísafjörður, Westfjords region, its initial role was to facilitate communication between the native‑ and foreign-born populations across the country, work with municipalities to strengthen service provision for immigrants, and facilitate the integration of the foreign-born to Icelandic society. While initially only a three‑year pilot project, its role has expanded considerably since it became a statutory institution in 2012. In 2023, the institution was merged with the Directorate of Labour in an effort to strengthen integrated service provision for the immigrant population (Althing, 2023[31]).

The financial crisis of 2008 left its mark on integration policy in Iceland, at a time when integration policy had recently become a government priority for the first time. In January 2007, the first government policy on the integration of immigrants was formulated. The policy‘s objective was to „ensure that all residents of the country enjoy equal opportunities and become active participants in society and in as many areas of human life as possible“ (Ministry of Social Affairs and Labour, 2007[32]). Several objectives and measures were listed along several main themes, the most pertinent one being language training for adults. Expenditure on Icelandic language courses was greatly increased but only for a short-lived period, as the field saw severe cuts in 2009‑10 in response to the financial crisis (Figure 2.17). Relative expenditure has since then not recovered to previous levels, despite an increase in demand for language courses (see Chapter 3).

Figure 2.17. Icelandic lessons for migrants faced cuts in the financial crisis and expenditure has not recovered since

Annual expenditure on Icelandic lessons for foreigners, 2005‑22, ISK in constant 2022 prices

Note: One million ISK corresponds to about EUR 6 700.

Source: OECD Secretariat calculations based on data from the Ministry of Higher Education, Science and Innovation (2005‑18); and Rannis (2023[33]), Úthlutanir, www.rannis.is/sjodir/menntun/islenskukennsla-fyrir-utlendinga/uthlutanir/.

In 2007, the Development Fund for Immigration Issues was established by the Ministry of Social Affairs and Labour. Its stated objective is to promote research and development in the field of immigration with a view to facilitate the integration of migrants into Icelandic society and to better enable society to accommodate them. Since 2007, the fund has supported a total of 218 projects. Grants are awarded annually and may be awarded to associations, unions and public entities, and to individuals for research purposes. The fund‘s budget amounted to ISK 40 million (EUR 260 000) in the year 2023 (University Centre of the Westfjords, 2021[34]; Ministry of Social Affairs and Labour, 2023[35]).

In 2007, the Icelandic Government decided to fix its annual refugee resettlement quota at 25‑30 individuals. Due to the financial crisis, the quota was reduced in the following years and did not reach the previously determined levels until 2016 when the government substantially increased the number of refugees to be resettled in response to the refugee crisis (UNHCR, 2016[36]). In the years 2016‑22, an average of 50 quota refugees have been granted protection in Iceland on an annual basis (Government of Iceland, 2023[12]).

Integration policy is put on a strong legal ground only in 2012

In 2012, the Act on Immigration Issues was adopted in the Althing, the Parliament of Iceland. It was the first comprehensive legal act that covered the integration of immigrants into Icelandic society and remains the primary legal instrument on integration matters. The Directorate of Labour is entrusted with enforcing the law, which includes providing counselling services, assisting municipalities in receiving migrants, collect and disseminate relevant information on the rights and obligations of migrants, and collect and analyse data on immigrants (Althing, 2023[31]).

With the 2012 Act on Immigration Issues, the primary bodies pertaining to the integration of immigrants that had been informally established in the years prior were transformed into statutory bodies, reducing uncertainty about their status or funding arrangements. These bodies include the Immigration Council, a consultative body entrusted with, inter alia, informing the minister with recommendations on relevant integration policy and on grants from the Development Fund for Immigration Issues. The Refugee Committee, another consultative body which advises the Minister on Refugee Policy, was legally recognised four years later with the Act on Foreign Nationals.

The 2012 Act also included a provision on what is now a primary tool in the integration policy toolbox: a quadrennial Action Plan on Immigration Issues. Every four years, the Minister of Social Affairs and Labour puts forward a bill in the Althing outlining relevant actions on immigration matters. Prior to the proposal in the Althing, the minister is expected to undertake consultative opinions from other ministries, institutions, the Directorate of Labour, and the Immigration Council. For the 2022‑25 Action Plan on Immigration Issues, see Box 2.5.

Box 2.5. The 2022‑25 Action Plan on Immigration Issues

The Action Plan on Immigration Issues for 2022‑25 has five pillars: Society, family, education, the labour market, and refugees. Under each pillar is a list of objectives with actions and how to execute them. Relevant actors responsible and stakeholders are also listed.

The society pillar aims to improve policy formulation; public service access for immigrants; and training for public service workers. One of the explicit objectives is to formulate a clear and comprehensive long-term integration policy in immigrant, refugee, and multicultural matters. Examples of concrete actions include improving data collection by measuring perceptions of society towards migrants and the perceptions of migrants towards service provision. Further actions pertaining to data collection are lacking.

The family pillar highlights the participation of immigrants in all areas of society; housing; and social security and welfare. Actions include highlighting for migrants existing support measures in the housing market, such as through registering a legal domicile in the country and raising awareness of eligibility requirements for housing allowances.

The education pillar highlights multicultural learning; the professional development of teachers; the continuity of learning; and Icelandic as a second language. Actions include strengthening the assessment of qualifications for immigrant students and workers, making Icelandic language learning competency-based, and increasing the number of teachers of foreign descent within the education system.

The labour market pillar highlights equal opportunities in the labour market; actions to reduce unemployment among immigrants; accessible information on the rights and obligations of employees and employers; and a revision of immigrant employment laws. Various initiatives are listed, including regular research on the pay gap by ethnic background and the simplification of residence and employment permit procedures.

The refugee pillar highlights integrated services; mental health and active participation in society; and research and improved information. Actions include setting up a co‑ordinated reception centre with integrated services and the creation of an information pamphlet for newly arrived refugees.

Source: Althing (2022[37]), Parliamentary resolution on an Action Plan on Immigration Issues for the years 2022‑25.

A co‑ordinated response to an unprecedented increase in refugee arrivals

In reaction to a rise in humanitarian arrivals, the Ministry of Social Affairs and Labour (at the time the Ministry of Education and Children) signed in 2020 agreements with five municipalities which aimed at ensuring continuous and equal provision of services to refugees irrespective of their country of origin. The pilot project became a fixed contract in 2022 available to all municipalities in the country, establishing a unified system of reception for refugees. In the same year, a reception centre for refugees was opened in Reykjavík, where individualised services are provided to recent arrivals in a one‑stop shop. In the scheme, municipalities receive financial assistance from the state to account for services provided during the first three years of stay. The amount provided depends on the refugee‘s family situation. For instance, for each single and childless beneficiary of international protection, the municipality will receive ISK 478 000 (EUR 3 100) in the first year, ISK 182 000 (EUR 1 200) in the second year, and ISK 121 000 (EUR 800) in the third year. This sum is expected to cover counselling services, administrative assistance and housing.

In March 2023, in response to the increase in refugee arrivals, the Prime Minister‘s Office set up a co‑ordination team for the reception of refugees. The team, which is set to work for three years, has the role of streamlining and co‑ordinating the reception of refugees across ministries, institutions and municipalities.

Gaps in service provision for asylum seekers exist, depending on whether services are provided on the municipal or national level. The 2016 Act on Foreign Nationals stipulated that services for asylum seekers would be provided by municipalities with reference to a contract between municipalities and the state. Due to a large increase in applications in that year, the contracts were not able to capture all service users and today only 27% of applicants receive services on the basis of such agreements, while 73% receive services from the Directorate of Labour (Ministry of Social Affairs and Labour, 2023[38]). Whereas the Directorate of Labour provides access to basic services such as medical assistance, schooling and public transport services, municipalities provide more extensive services. Depending on the municipality, these may include Icelandic language and civic integration courses, activities for unaccompanied minors, access to kindergarten and leisure services for children.

Key stakeholders in integration policy

The Ministry of Social Affairs and Labour is the primary actor in integration policy

While several ministries are involved in integration policy in Iceland, the Ministry of Social Affairs and Labour remains the primary actor. For the year 2022‑23, the budget line “immigration and refugee issues” amounted to a total of ISK 2.43 billion, i.e. EUR 16.2 million. The vast majority of the budget line – ISK 2.37 billion – was allocated to the Ministry of Social Affairs and Labour. The ministry is responsible for the co‑ordination of integration policy for immigrants and is also directly responsible for several important factors to integration, such as employment, welfare and social policy. It is also charged with the reception of resettled refugees, in co‑operation with the Office of the United Nations High Commissioner for Refugees (UNHCR). In 2022, several policy areas were transferred between ministries, and the Ministry of Social Affairs and Labour was made responsible for the provision of basic services for individuals applying for international protection. This had previously been a responsibility of the Ministry of Justice, which still regulates the entry and residency of foreigners. Another policy area of relevance for integration that was transferred to the ministry’s portfolio in 2022 is lifelong learning. Lifelong learning centres are also the main providers of language courses across the country.

The Ministry of Social Affairs and Labour also oversees the Directorate of Labour, which plays a major role in service provision for immigrants. The Directorate of Labour operates the public employment service (PES) and several other labour market and social services. The PES runs eight service centres across the country that function as one‑stop shops and provide employment registration, skills assessment, counselling and benefits, as well as job placement to jobseekers. The service centres also co‑operate with other service providers on benefits and labour market measures, most prominently municipalities. They also handle the issuance of work permits and the registration of immigrants in the Icelandic labour market and temporary work agencies (Directorate of Labour, 2022[39]). Currently, over half of all jobseekers registered with the PES are foreign-born. In response, the Directorate of Labour established in 2024 an international department with the role of overseeing service provision for unemployed immigrants. The department employs ten people with varying backgrounds and languages and offers numerous courses for immigrants. These include self-empowerment courses, CV-building, jobseeking help, Icelandic language learning, certified education paths in co‑operation with lifelong learning centres and special projects for jobseeking youth.

In March 2023, the Multicultural Information Centre was merged into the Directorate of Labour, with the aim of providing holistic and integrated services for immigrants, refugees and asylum seekers in one place. In its reasoning, the Ministry of Social Affairs and Labour particularly noted the success of the reception centre for refugees, established in April 2022, where services are provided for recent refugee arrivals in a one‑stop shop. Co‑operation between levels of government and the efficiency of service provision would also be improved, although no quantifiable criteria were put forward on how to achieve this objective (Ministry of Social Affairs and Labour, 2022[40]).

The Ministry of Education and Children is the only other ministry with a specific budget line for integration, albeit only a small amount (ISK 60 million, or EUR 400 000), mainly for language learning for migrant children. However, the contribution is low as municipalities are responsible for compulsory education.

The Ministry of Infrastructure operates the Local Governments‘ Equalisation Fund (Jöfnunarsjóður sveitarfélaga), one of whose objectives is to provide language support for children with an immigrant background. For the year 2024, municipalities were allocated a total of ISK 884 million (EUR 5.75 million) in language support for children with an immigrant background.

The Prime Minister‘s Office is responsible for anti-discrimination policy, human rights and overall co‑ordination of government policy. In 2023, against a backdrop of a significant increase in refugee arrivals in 2022 and 2023, the ministry established a co‑ordination team tasked with ensuring a co‑ordinated reception of refugees through all levels of government (Prime Minister’s Office, 2023[41]).

The Ministry of Justice is responsible for the processing of applications for international protection, the issuance of residence permits, and legal assistance in cases of appeal of decisions concerning such applications.

Co‑ordination with municipalities has increased significantly in recent years

Municipalities are an important actor in integration policy and their role has increased in recent years. In 2009, the Icelandic Association of Local Authorities developed its own multicultural policy, and several municipalities have adopted targeted policies of their own. Most of the larger municipalities have begun to employ multicultural representatives, charged with overseeing integration policy in the municipality, and providing multicultural support throughout the policy making process (Icelandic Association of Local Authorities, 2022[42]). Municipalities are also allowed by law to apply for grants via the Development Fund for Immigration Issues.

Municipalities provide the same set of basic social services to the foreign- and native‑born populations alike. Municipalities must, among other things, provide social counselling, social home services and support for housing, drug and financial issues. In addition to these basic services, a special set of services is afforded to refugees who live in municipalities that have entered into an agreement with the Ministry of Social Affairs and Labour on the co‑ordinated reception and integration of refugees. A total of 12 municipalities have signed such an agreement as of April 2023, covering the vast majority of refugees.

Social partners play a large role in migrant integration compared to other OECD countries

A defining characteristic of the Icelandic labour market is its wage bargaining model, which is based on social dialogue and tripartite co‑operation between the government, employers and workers organisations. This model has contributed to low inequality, high inclusiveness and a gender balance (OECD, 2017[43]). There is no statutory minimum wage and collective bargaining coverage remains around 90%.

Iceland has by far the highest trade union density among OECD countries, at 92% – meaning that more than nine out of ten wage and salary earners are members of a union. Whereas a general decline in union density can be observed among OECD countries over the past several decades, including in the other Nordic countries, Iceland‘s unionisation rate has remained stable. Immigrants exhibit similar patterns to those of the native‑born when it comes to union density in Iceland, in some sectors exceeding the native‑born population (Statistics Iceland, 2019[26]). However, breaches of wage agreements are still much more common among foreign workers and youth in the lowest income group (Sigurjónsdóttir, 2021[44]). Although immigrants made up only one‑fifth of the Icelandic workforce in 2018, more than half of all complaints of work-related violations received by the Icelandic Confederation of Labour were from foreign-born workers in that same year.

In addition to providing work-related services, unions play an active role in service provision for immigrants. They are the majority owners of most lifelong learning centres, who provide the bulk of language and civic integration courses offered to immigrants. Courses for the unemployed and refugees, as part of the offer by the public employment services, are often outsourced to these centres.

Civil society‘s role in integration is limited and primarily services refugees

Much like its Scandinavian neighbours, Iceland has for the most part kept service provision for the immigrant population within the purview of the state and its labour unions, with several exceptions. The Icelandic Red Cross has been involved in service provision for immigrants and primarily refugees since 1956, when Iceland accepted its first group of resettled refugees. The Red Cross operates several social assistance projects aimed at facilitating integration, notably „Leiðsöguvinur flóttafólks“ (refugee friend), a mentorship programme for refugees; several language training projects in which volunteers engage informally with refugees in Icelandic; and „Tómstundasjóður“ (recreational fund), intended to allow the children of refugees to partake in recreational activities such as music, sports, dancing and other courses. From 2014‑22, the Icelandic Red Cross was also responsible for legal representation to all applicants for international protection.

The 2022‑25 Action Plan on Immigration Issues (Box 1.5) foresees greater participation of civil society associations in service provision for immigrants than before. Civil society associations are mentioned in three of the five pillars as potential stakeholders, notably to provide immigrants with information and counselling services.

Consultation with the immigrant population is facilitated by the Immigration Council and the Refugee Committee

The Immigration Council, which consists of six delegates nominated by several ministers, is actively involved throughout the policy making process at the national level. The Minister of Social Affairs and the Labour Market appoints a chair and a vice‑chair, one of which must be an immigrant. The role of the Council is inter alia to facilitate public debate on immigration matters via conferences and meetings with stakeholders, including immigrants. The Refugee Committee‘s main role is to provide recommendations to the minister on the annual decision to admit quota refugees. The Minister of Social Affairs and the Labour Market appoints its chair, who must have professional knowledge in refugee matters.

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[26] Statistics Iceland (2019), Social indicators: Special issue on immigrants, http://hagstofan.s3.amazonaws.com/media/public/2019/901e98bb-a182-4dc1-9059-261b7bea719b.pdf (accessed on 21 April 2023).

[29] Stefánsson, K. (2023), “Aðskilin búseta: Búsetumynstur pólskra innflytjenda í Reykjavík”, Íslenska Þjóðfélagið, Vol. 14, pp. 161-180, https://opinvisindi.is/bitstream/handle/20.500.11815/4617/tf.a.2023.14.2.11.pdf?sequence=1 (accessed on 31 March 2024).

[36] UNHCR (2016), UNHCR Resettlement Handbook: Country chapter: Iceland, https://www.unhcr.org/3c5e58384.pdf (accessed on 11 April 2023).

[34] University Centre of the Westfjords (2021), Development Fund for Immigration Issues, https://www.uw.is/thjonusta/throunarsjodur_innflytjendamala/ (accessed on 18 April 2023).

[28] Varða (2024), Workers in Iceland 2024 survey.

Notes

← 1.  Tourism accounted for 6.1% of GDP, construction for 7.2% and fisheries for 6.5%. “Fisheries” refers to fishing, aquaculture and the processing of fishery products.

← 2.  Housing allowances refer to húsnæðisbætur, formerly known as húsaleigubætur.

← 3.  The number for the native‑born may be downwardly biased, as the survey data excludes much of the higher-skilled population who are members of the Icelandic Confederation of University Graduates (Bandalag Háskólamanna). The share of migrants who are members of that union is very small.