Considerable employment growth achieved in Norway

Norway is outside the EU and thus, unlike the Member States, not bound to formulate a National Action Plan for employment for 1998. However, employment policy goals are worked out annually in the national Budget. The employment rate in the Norwegian labour market is on the increase, with figures showing that 69.5% of the population aged between 16 and 74 were in employment in 1997. Unemployment declined from its peak in 1993 of 6.0% to 4.1% in 1997, and further reductions in unemployment are expected in the latter part of 1998.

Norway has experienced favourable employment statistics over the last few years. Newly published figures from Statistics Norway show that there has been a further fall in unemployment, and the employment rate is higher than ever. Norway is not a member of the European Union, and is thus not bound by a commitment to formulate National Action Plans for employment in line with the EU's 1998 Employment Guidelines. Employment policy goals are, however, worked out annually in the National Budget.

Favourable developments in the job market

The employment rate in the Norwegian labour market is high by international standards. Figures show that 69.5% of the population aged between 16 and 74 were in employment in 1997, compared with 64.1% in 1993 (see Table 1 below). The number of people in employment increased by nearly 200,000 (9%) over the four-year period. In the same period, unemployment declined considerably. Figures from the Labour Market Surveys show that unemployment has fell from 6.0% during the peak year of 1993, to 4.1% in 1997. In the same period, registered unemployed people as a percentage of the labour force declined from 5.5% in 1993 to 3.3% in 1997. The improvements in the employment situation have continued in the first quarter of 1998, and further reductions in unemployment are expected in the latter part of 1998. In the revised national Budget, which was made public on 15 May 1998, unemployment is estimated to be 3.25% in 1998 and 2.75% in 1999.

Table 1: Developments in employment and unemployment rates, 1993-1st quarter 1998
Employment rate % (16-74 years old) Unemployment rate %
. Total Men Women Total Men Women
1993 64.1 69.1 59.1 6.0 6.6 5.2
1994 64.9 69.9 59.7 5.4 6.0 4.7
1995 66.2 71.3 61.1 4.9 5.2 4.6
1996 67.8 72.9 62.5 4.8 4.8 4.9
1997 69.5 74.5 64.4 4.1 4.0 4.2
1998 1st quarter 69.9 74.6 65.2 3.5 3.7 3.4

Source: Statistics Norway - Labour Market Surveys.

Unemployment has been slightly higher among men than women throughout the 1990s, but there are now only minor differences between men and women. In 1997, unemployment fell more steeply for women than men. Approximately 86,000 people are classified as "under-employed", and a large majority of these are women. The implication of this is that approximately 6% of all female employees want extended weekly working hours.

Youth unemployment is also waning, especially among young women. Within this group, however, unemployment is much higher than the national average - see table 2.

Table 2: Unemployment rate (%) among young people aged 16-24
. 1st quarter 1997 1st quarter 1998
Men, 16-24 9.8 10.2
Women, 16-24 13.7 9.2
Total, 16-24 11.6 9.7

Source: Statistics Norway - Labour Market Surveys.

There has also been a downward trend in unemployment among immigrants, although it still remains relatively high within this group. Registered unemployment among first-generation immigrants fell from 10.7% in November 1996 to 8.1% in November 1997. There has also been a substantial reduction in long-term unemployment - ie people who have been out of work for at least 26 weeks. In April 1998, approximately 16,000 people were registered as long-term unemployed, which means a reduction of 10,000, or 39% in the last 12 months.

Action to increase employment

In 1992 a public committee - the Norwegian Employment Commission- produced a long-term plan which was aimed at increasing employment. The plan covered the period 1993-7. The most important measures included an active labour market policy combined with incomes policy cooperation in order to secure moderate wage growth. The employment goals of this plan were reached sooner than had been expected.

The Norwegian Government has in recent years also pursued a policy aimed at increasing employment by motivating people to take up paid work, and by encouraging people to pursue longer work careers. The requirements involved in receiving disability pension and other social benefits have become more stringent, and so too has the requirement for unemployed people to accept jobs which have been offered to them by the labour exchange. In the national Budget for 1998 it was stated that the main challenge "was to secure sufficient access to manpower in order to fill vacancies in the labour market". The health sector, the construction industry and some manufacturing sectors are now experiencing considerable problems in recruiting labour with the requisite qualifications.

Labour market initiatives have been common throughout the 1990s, but have been scaled down in the last two years. In April 1996 there were approximately 38,000 people involved in ordinary job creation schemes, while two years later in April 1998 the number had declined to 18,000.

The number of places available at upper secondary school level and at university level also increased in the 1990s. Reform in the upper secondary school system in 1993 meant among other things that all young people between the ages of 16 and 19 are now guaranteed a place in an educational institution. Those who do not receive job or training offers are offered places in job creation schemes ("the youth guarantee scheme"). One aim for 1998 is to guarantee young people aged 20-24 places on job creation schemes, providing they have been unemployed for more than six months.


There has been a general consensus between employers and unions about the direction of Norwegian employment policy in recent years. The employee side, however - and especially the Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO) - has stressed that moderate pay settlements are conditioned by the level of job creation schemes being kept high. Reduced working hours and/or changes in the retirement age have been downplayed as a means to combat unemployment. In exchange for moderate pay settlements, the employee-side has managed to gain support for various social reforms with implications for the situation on the labour market. Paid maternity leave has been extended and a voluntary early retirement scheme for those between 62 and 67 has been established (NO9704108F).

The employers' organisations, and several political parties, want to see less restrictive regulations on the recruitment of labour and the use of temporary employment contracts, and less restrictive measures in relation to the use of overtime. The present legal framework, however, has not undergone any major changes in these areas.

The reform which has sparked most debate recently is the introduction of cash benefits for parents of small children who do not attend nursery schools. The reform, which secured a majority in Parliament, has been met by scepticism from the labour market parties, which is grounded in the fact that it might encourage women to leave paid work at a time when there is a tight labour market.

In the 1990s, employers and unions have been strongly involved in continuing vocational and occupational training, and setting up apprenticeship places. Prior to 1998's pay negotiations, LO and the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO) reached agreement on a joint plan of action for life-long learning in order to secure for most employees the right to continuing vocational training (NO9804161F). (Kristine Nergaard, FAFO Institute for Applied Social Science)

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