The Nordic labour market turns 70 – but is it being fully explored?

Researchers at Nordregio have examined the state of the common Nordic labour market. What has surprised them the most is that so few Nordic citizens move or commute to a different Nordic country these days.

Just 1.6 per cent of the Nordic population were born in a different country to the one they are currently living in. Compare that to the EU, where 3.9 per cent were born in a different European country.

The fact that passport-free travel exists and there is no need for work or residency permits makes it harder to understand why this is the case. Earlier, there were major waves of migration within the Nordic region. 

As Finland’s Minister of Employment Arto Satonen pointed out on the first day of the anniversary conference in Malmö’s Hyllie district, 700,000 people living in Sweden have Finnish ancestry.

Perhaps the countries have become too similar, perhaps it is trickier to get a bank account and a place to live these days, or perhaps other countries are more tempting?

“The decision to move to another country is always an individual one,” pointed out Jon Stråth, from EURES, the European Employment Services Network.

“It is one teacher who is moving, not teachers as a professional group.”

When you talk to those who have actually made the move, it becomes clear that there are many things behind the choices people make. Ten years ago, the Nordic Labour Journal published a special edition covering the 60th anniversary of the common labour market. We spoke to Nordic citizens who had moved during the six decades that had passed since the signing of the deal. 

Now, we have added to that by interviewing some of those who have moved in the latest decades. What really happened to the “Party Swedes” who worked in Norway in the 2000s? What makes a Danish priest move to Lillehammer in Norway? And do those who commute between Denmark and Sweden today feel it works for them?

It is obvious that political decisions have real consequences. But things do not always move fast. Johan Strang, Professor of Nordic Studies at the University of Helsinki, said that during the Nordic Council’s first meeting in 1953, three issues were on the agenda:

• Finland’s empty chair (the country did not join until 1955)
• A proposal to build a bridge across Øresund
• Establishing a common labour market

It took 47 years before the bridge across Øresund was ready, but the common Nordic labour market was established already on 1 July 1954.

Before the Øresund Bridge was opened on 1 July 2000, only 800 people commuted across Øresund. In 2023, the traffic beat all previous records with nearly 100,000 passenger trips every day.

On 10 June this year, Denmark and Sweden signed a new tax agreement for those who live on one side and work on the other – physically or digitally. 

This agreement, hopes Sweden’s Minister for Employment Johan Pehrson, will lead to even more people taking advantage of a bigger labour market, and that it can become an inspiration to other parts of the Nordics. 

One of those who work a lot on Nordic issues is Fredrik Karlström, a former government minister in Åland. He would like to see something new and big that would be meaningful to many people.

“This could be electronic ID, which is absolutely necessary, or something simpler like a reform of the companies act. It is not that difficult politically but means a lot to the labour market and companies that want to expand. It could make it easier for people who want to set up and run businesses in a harmonised market.”

Several of the conference speakers pointed out that the Nordic labour market also includes other people beyond Nordic citizens. It is also important to grant those who arrive from countries outside of the EU/EEA the same opportunities to commute to a different Nordic country. The Nordic countries ought to market the region together in order to attract the necessary talent – and make sure they like it here when they arrive.