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Following the economic crash in 2008, many migrants in Iceland lost their jobs and experienced deteriorating working conditions. In 2011, four years after the onset of the recession, the unemployment rates among the foreign population remained significantly higher than among Icelanders. In this article, we discuss experiences of unemployed migrants concerning their changed position on the labour market in order to highlight the different mechanisms of labour market exclusion. On the basis of research among registered unemployed foreign citizens, we analyse the main reasons for their difficulties in finding new employment. The main obstacles as reported by survey respondents and focus groups participants were limited knowledge of Icelandic, increased reluctance among Icelandic employers to hire foreigners and insufficient social networking with the native population.

The employment‐driven migrations from Poland to Iceland have largely been pioneered by Polish women. They outnumbered men among Polish residents in this country until the economic boom since 2005 triggered large‐scale male immigration. This trend slowed down with the outbreak of the financial crisis, as the recession severely affected the male‐dominated construction industry. The analysis of Polish female migrants’ working experiences shows that recent inflows are mainly shaped by the nature of labour demand as well as the social policies and care services in Iceland. Although economically integrated, compared with native women Polish women tend to occupy rather disadvantaged positions. They seem concentrated in a few low‐skilled occupations that bring little prestige and low income. On the other hand, they were less affected by the financial crisis, in the sense that many of them maintained work, though some experienced lowering of salaries or reduction of working hours.

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