The Ripple Effects of The Icelandic Financial Crisis: Social Fabric and Public Health in Post-2008 Iceland

Mehmet Harma ()
Additional contact information
Mehmet Harma: University of Akureyri, Faculty of Psychology

A chapter in Crisis in Context, 2026, pp 165-192 from Springer

Abstract: Abstract This chapter examines how Iceland, known for its strong institutional trust and social cohesion, responded psychologically and socially to the 2008 financial crisis. Using open and multi-source datasets, including the European Social Survey, Statistics Iceland, and the WHO Mortality Database, I examined changes in the social fabric and public health indicators before and after the crisis. The results revealed that trust in political institutions such as parliament, politicians and political parties fell sharply after the crisis, while trust in the legal system remained stable and even increased for the police, especially among highly educated citizens. In terms of health outcomes, in contrast to other Nordic countries, cerebrovascular mortality increased after the crisis. Meanwhile, indicators of psychological well-being, such as life satisfaction and happiness, showed more pronounced declines among the middle and highly educated groups. These findings are partially consistent with the predictions of System Justification Theory, scarcity mindset, and life history theory, and point to context-specific boundary conditions in psychological responses to crises. Iceland's post-crisis transparent governance and public accountability likely played a key role in buffering against deeper social polarization. In this chapter, I have illustrated how crisis responses are filtered through social, cultural, and institutional lenses.

Keywords: Financial crisis; Social fabric; Trust; Psychological well-being; System Justification Theory; Scarcity mindset (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-032-02657-6_10

Ordering information: This item can be ordered from
http://www.springer.com/9783032026576

DOI: 10.1007/978-3-032-02657-6_10

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().