Indicator 1.13 - Unemployment
Long term unemployment can create various social and economic problems. 
Therefore, communities try to avoid long periods with high unemployment rates since such conditions are not sustainable.
The new jobs created by the Fljótsdalur Power Station and Alcoa Fjardaál projects will change the employment market in East Iceland and could influence unemployment rates in the area. However, it is not obvious what the effects will be since more jobs will not automatically lead to a lower unemployment rate.
In the past, a stagnant job market in East Iceland has resulted in people moving away to areas where there were more jobs, rather than staying unemployed.
Also, a gender imbalance in the types of jobs created by the projects (both direct and indirect jobs) could result in an increase in unemployment rates.
Performance
Unemployment has generally been lower in East Iceland than the rest of the country since 2004. Prior to 2004, unemployment figures were often higher in East Iceland than nationwide. In 2010, unemployment rates were generally 50% lower in East Iceland as compared to the national average - or 4.4% on the average in East Iceland compared with 8.9% in all of Iceland.
The development since 2000 can be seen on the graph below, which shows that unemployment in Iceland increases at a much faster rate than in East Iceland.
RED: Capital area BLUE: All of Iceland
GREEN: Outside the capital area PURPLE: East Iceland (Austurland)
Graph 1. Unemployment in Iceland and East Iceland 2000-2010.
Graph 2. Unemployment in Iceland and East Iceland 1980-2010.
Resource: Directorate of Labour, 2011.
30.03.12
Metrics, Targets and Monitoring Protocol
What is measured?
Unemployment rate in East Iceland and nationally. (Project effect: induced).
Target
Unemployment rate in East Iceland less than or equal to national rate.
Monitoring Protocol
The Directorate of Labour collects this information.
Rationale for Indicator Selection
Long term unemployment can create various social and economic problems. Therefore, communities try to avoid long periods with high unemployment rates since such conditions are not sustainable.
The new jobs created by the projects will change the employment market in East Iceland and could influence unemployment rates in the area. However, it is not obvious what the effects will be since more jobs will not automatically lead to a lower unemployment rate. In the past, a stagnant job market in East Iceland has resulted in people moving away to areas where there were more jobs, rather than staying unemployed.
Also, a gender imbalance in the types of jobs created by the projects (both direct and indirect jobs) could result in an increase in unemployment rates.
