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Titill

Labour Market Performance in Iceland

Útdráttur

This paper focuses upon the unique performance of the Icelandic labour market. It
demonstrates, by using international statistics, that the activity rates of both sexes are
very high in Iceland, the unemployment rate is low, a high proportion of the the
labour force work part time, and labour legislation is unrestricted.
Contrary to the competitive labour market–, and flexible models of neo–
classic economic theory, the author argues for a historical and institutional
explanation of the Icelandic case. Hence, the high labour market flexibility and the
good performance of the labour market can to a large extent be explained by a fishing
economy characterized by frequent economic fluctuations, a small domestic market
protected from international trade until 1994, and a decentralized labour movement.
In recent years, some changes have taken place in the Icelandic economy. These
include mergers and acquisitions of firms, internationalisation, stricter labour
legislation due to EU regulations and directives and economic stability. All these
changes could move the Icelandic labour market performance closer to the European
pattern in the near future.
JEL classification: J20, J30, J40
Keywords: Labour Market, Iceland, Labour Legislation, Flexibility

Birting
1.12.2003


Skrár
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