The Nordics lack children – only Greenland stands out

You would think that people would not hesitate to have children when living in a region with low unemployment, high levels of gender equality, low wage gaps and generous parental leave. 

Yet despite an overall growth in the total population in the Nordic countries, fertility rates in Finland, Norway and Iceland have never been lower. Greenland stands out because children there outnumber old people by more than two to one. The only place where more people are born than die is the Faroe Islands.

“We’re moving towards a China-like situation but without any sort of one-child policy,” said Senior Research Fellow at Nordregio, Anna Karlsdóttir at the launch of the report State of the Nordic Region 2020 on 4 February. Nordregio produces the report on commission from the Nordic Council of Ministers.

Lower fertility rates than the European average

Iceland’s fertility rate has fallen from 2.2 to 1.7 child per woman in ten years. In Finland and Norway, the average is 1.41 and 1.56 respectively – lower than the European average. 

The total fertility rate in the Nordic region from 1950 to 2018. Source: NCIS and Eurostat 

On the positive side, the report’s authors highlight the fact that fathers now take more responsibility for raising the next generation thanks to paid paternity leave. The Nordic countries continue to be world leaders in the work towards full gender equality.

Karlsdóttir is nevertheless surprised that the generous provisions for parental leave and childcare in the Nordic countries have not had a greater impact on birth rates. She believes this might have had a reverse effect, with women choosing to give birth later in life as they opt for an education and a career first. Today, the average age of a first-time parent in the Nordic Region is 30.

A need to plan for an ageing population

At the same time, all of the Nordic countries are facing ageing populations, and it is a trend that looks set to continue.

Although there are some significant differences between the different Nordic countries when it comes to the number of older people, their health status and quality of life, the report points out that it becomes increasingly important for the entire region to plan for a future with an older population.

“You must for instance create more age-friendly living conditions and make urban configurations, public transport systems and housing stock more accessible for people of all ages and abilities.”

An older but healthier population should not be seen as a burden, but as an untapped potential, the report says.

Fewer children than older people

There are now more older people (above 65) than children (0 to 14) in both Denmark, Finland, Sweden and Åland. Norway has approximately the same number of old people as children, but the old are expected to overtake the young in a few years.

The situation is different in Iceland, the Faroes and Greenland, where there are still more children than older people. Greenland differs the most in a Nordic context, with more than twice as many children as older people.

The number of children (red line) and older people (grey line) as a proportion of the total population in Greenland and Åland, 1985–2019, and projections to 2040. In Åland, the number of older people bypassed the number of children already in 2009. Greenland still expects to have more children than older people in 2040. Source: Nordic Statistics. 

“This can be related to Greenland having a combination of comparatively high fertility rates and the shortest life expectancy in the Nordic Region,” write the report’s authors.  

Immigration helps fight depopulation

Despite low fertility rates and ageing populations, the total population in the Nordic region has grown by 18% since 1990 – much thanks to net migration.

Most immigrants are younger and of working age, but they still cannot stop the trend of the Nordics’ ageing populations. The region’s generous welfare systems are dependent on high employment levels, and it is therefore important that immigrants find work as quickly as possible.

According to the report, immigrants and refugees have had a positive effect on several regions in the Nordics. They have helped increase the population in one-quarter of Nordic municipalities, many of which had struggled with depopulation and an ageing population.

Immigration has been behind two-thirds of the population growth in the Nordic region since 1990. The graph above shows the percentage of the population that is foreign-born as a share of the total population, from 1990 to 2019. Source: Nordic Statistics.

That means that the successful integration of migrants is crucial if the trend in sparsely-populated areas is to be reversed, the report underlines.

“When given the opportunity to get an education, to become self-sufficient, and to be considered on an equal footing with others, migrants make a truly positive contribution to development,” said Anna Karlsdóttir from Nordregio.

The robots are coming

The ageing populations and fewer births will also have an effect on the Nordic labour markets. The report points out that the average Nordic employment rate is nearly 80%, well above the EU average of 67.7 %. But what does the labour market look like in 2040?

The report’s authors have estimated that nearly one-third of Nordic jobs could be at “high risk” of automation in the future. Municipalities in Denmark appear to be most heavily affected, along with many rural municipalities in the other Nordic countries. The report points out that these changes to the labour market are unlikely to be evenly distributed from a spatial perspective.

“As such, it is necessary to consider the capacity of different types of regions and municipalities to adapt to new labour market structures. Part of the challenge will be ensuring that skills and knowledge in a region are consistent with the employment opportunities on offer. This is particularly relevant in the Nordic region’s sparsely populated areas,” write the report’s authors.

What else will the future bring?

The total Nordic GDP for 2018 stood at $1.64 trillion, which makes the Nordic region the world’s 12th largest economy. Yet although the Nordic economies are strong on a global scale, all of them face challenges linked to demography, technology and the exploration of natural resources. Norway has long had a debate about what should “replace” oil and gas.

State of the Nordic Region 2020 highlights the fact that the Nordics are already considered to play a unique and innovative role in developing new economic models.

"The new, more refined and extended bioeconomy has a positive effect on regional development and economy, jobs, innovation and knowledge,” the authors write. They point to a 15% increase in jobs within the bioeconomy over ten years, with the greatest growth in Sweden, Denmark and Norway. The bioeconomy is considered to be a necessary replacement for the fossil economy.