The Impact of External Economic Situation on Labor Market of the Faroe Islands in 2000–2025

Being essentially an island microstate, the Faroe Islands have a number of features of their economic development: high dependence on two industries (fishing and fish farming), which directly employs about 1/3 of the workforce, as well as a limited labor market, where unemployed residents most often travel abroad. The majority of them are young people under the age of 35, for whom there are no vacancies in their homeland. At the same time, like any microstate, the Faroe Islands are very dependent on external economic factors, including in the sphere of domestic employment. The purpose of this article is to examine the changes in the Faroese labor market over the last 25 years under the influence of external factors. The object of research is the labor market of the autonomy, and the subject is the external economic factors affecting it. Among them, were the relations of the Faroe Islands with the EU and Russia. The reorientation of the autonomy in its external relations to RF provided a major boost to the economy of the Faroe Islands in 2014–2023. In addition, an important factor in the economic development of the Faroe Islands has been the stimulation by the authorities of the development of inward tourism in it. Such a policy is generally characteristic of microstates, as well as a high proportion of employment in the civil service.

Faroe Islands, microstate, labor market, foreign economic relations, employment structure