Astrid Kunze - Norway labor market

Country labor market predictions: Astrid Kunze on the Norway labor market.

So the greatest challenge in Norway, or in, I know most about Norway, one often puts together the Scandinavian countries, seen from the outside of course they have a lot of similarities however, they are also quite different in some respects. So if I really look at Norway, and female employment, I guess your question’s also regarding female employment and women in the labor market, I would say a big challenge is really that the public sector is so large in Norway. So sixty per cent of women are working in the public sector.

Now the definition of the public sector is always a bit tricky because like health, every country needs a health sector, so it’s a question of how taxes are organised. But I would say, think that regarding wages it’s good to have a competitive private sector that gives women also the option to move in and out of the public sector. So that’s a big challenge I think generally, that we observe very little mobility between public and private sector, and that has of course an effect on wages, because public sectors usually pay lower, they offer different work schedules which have some amenities that compensate for that.

But then in the private sector you can really make higher wages in some sectors specifically. So I think this was one sector, one big question, big challenge that Norway has to deal with.

The other is incentives. The incentive to work. Of course working hours go down generally, which is a good thing, because in some countries still forty-two hours is a full time job, that’s difficult to combine with having a family. And at the same time we want to have high fertility, which is a huge challenge for many countries.

Now, Norway is in the fortunate position that they still have quite high fertility, but it’s also below two. So I think that an incentive to invest effort, to invest in productivity that’s a big challenge. Also given that the wages are very high in Norway so the incentive to move to other countries, like for university graduates, I think is not as high as in other countries.

But in globalised markets we would think this is very important that there is also a lot of mobility. But also of course in the country if you just look over careers, incentive to invest more, to increase wages over the career, are very important for the firms and for the individuals. So given the high welfare state cushions employees against a lot of risk, I believe this is a huge challenge also given the expenditure of course of the welfare state which are huge and we need tax income to finance the welfare state and sustain the welfare state.

So the third challenge I think is really the expansion of the private sector, what industries Norway will go into now they have been living on the fish industry and the oil sector very well for many years but of course this will not go on, so it’s very important I think for Norway to invest in the education sector and develop new private sectors that can create the employment for the future.