Reykjavík Integration and Employment Program (RIEP)

Executive SummaryIceland stands at a critical inflection point. With immigrants now comprising 18.9% of the total population , a figure that has surged from just 3% in the early 2000s , the country has experienced the sharpest rise in immigration of any OECD member state. Yet Iceland remains the only Nordic country without a formal integration programme for newly arrived immigrants. This gap is administrative and economically devastating. While immigrants in Iceland maintain an employment rate of 83% , the highest in the OECD, this figure masks a severe structural failure: 35% of highly educated immigrants work in jobs below their qualification level, compared to just 10% of native-born workers. This 25 percentage point overqualification gap is the largest in the entire OECD. The unemployment ratio between EEA migrants and the native-born is nearly 3:1, the highest in OECD-Europe. The OECD estimates that migration will boost Iceland's GDP by 6.5% by 2030 and 10.4% by 2040 , but only if immigrant skills are properly recognized and utilized. Without intervention, Iceland will continue to waste the talent of tens of thousands of qualified workers, paying the price in lost productivity, higher welfare costs, and brain drain as skilled immigrants leave for countries that value their contributions.Host-country language proficiency among migrants stands at just 18%, the lowest in the OECD, where the average is 60%. Over 50% of foreign-born workers report experiencing discrimination in the labour market. Anti-discrimination bodies have historically focused on gender and LGBTI+ issues, with fewer than a handful of ethnic discrimination cases reaching the Equality Complaints Committee per year.