Community Empowerment as a Tool to Reduce Unemployment: Contrasting Cases of Iceland and Ireland

Iceland and Ireland conduct radically different anti-crisis policies to reduce unemployment. Their strategies differ in the approach to the concept of community empowerment. After the Crisis of 2008, Iceland introduced measures to expand social partnership and vocational training, whereas the Irish government broke dialogue with trade unions and deprived them of their influence. This paper compares not only the two contrasting strategies but also their economic outcomes in the labour market. Thus, it aims to verify whether community empowerment enables a faster and more effective way out of the unemployment crisis. For this purpose, a statistical analysis of selected labour market indicators was performed. Results show that both countries have managed to reduce the unemployment and youth unemployment rate. However, this reduction should be interpreted, bearing in mind the fact that the Labour Force Participation Rate (LFPR) in Ireland is only 62%. The efficiency of the Irish approach has been undermined by detailed unemployment indicators. Until 2016, the long-term unemployed in Ireland accounted for over 50% of the unemployed. Long-term unemployment and underemployment have never returned to their pre-crisis levels. On the contrary, in Iceland, long-term unemployment is almost non-existent. Over 80% of the working-age population has been professionally active. Visible underemployment has remained below 10%. The differences between Irish performance and Icelandic performance in this research seem to be located in the governmental responses to the previous crisis. By following the rules of community empowerment, Iceland appears to have different unemployment conditions. Investment in human capital and efficient communication with citizens have resulted in higher economic resilience. Community empowerment may help reduce unemployment and develop a stable and inclusive labour market.