Up to 10,000 people might emigrate from Iceland in the coming years because of the economic crisis, according to Stefán Ólafsson, a professor in social sciences at the University of Iceland.
Ólafsson bases his estimate on a comparison with emigration numbers in the 1990s when Iceland was also going through economic difficulties, and forecasts on continued unemployment, Fréttabladid reports.
Ólafsson said that although such mass emigration would certainly prove a blow to the Icelandic community, it would still be manageable.
“The community could handle losing about three percent of its inhabitants,” Ólafsson stated. “I guess the pain threshold lies at five percent of the inhabitants [16,000 people]—then we would start feeling the impact of emigration.”
A new report undertaken by the University of Iceland Institute of Economic Studies states that the debt load of the Icesave commitments would increase significantly in case of mass emigration.
It is deemed likely that a large number of people will move away from the country in the coming years, although it is difficult to estimate the exact number.
Gudmundur Jónsson, a professor in economic history, agrees with the institute’s conclusions and recommends the government keep them in mind.
“Emigration usually means a decrease in gross domestic produce,” Jónsson said. “However, there could also be an increase in the individual contribution of gross domestic produce, for example if fewer employees will be left at workplaces that are currently over-employed.”
Jónsson said two periods have proved difficult because of emigration since Iceland became independent in 1944: 6,000-7,000 people left the country between 1968 and 1970 after herring fishing collapsed, and nearly 5,000 people emigrated in the 1990s.
The experience from these years shows that although the economic situation improves it takes time to reduce unemployment and limit emigration. The government must take that into consideration in the coming months, Jónsson urged.
Click here to read more about the report of the Institute of Economic Studies.