Young and older people in the Nordics face the same employment barriers

All of the Nordic countries have special measures aimed at young and older people who are outside of the labour market, but it does not make sense to define employment measures for these groups solely based on age. Young and older people face many of the same barriers, and more could be achieved by taking a broader approach rather than applying the traditional division into, for instance, youth and senior initiatives. 

This is one of the main conclusions in the third and latest report from researchers who, on behalf of the Nordic Council of Ministers, are conducting a comprehensive mapping of the Nordic countries’ efforts to include vulnerable groups in the labour market, and how efforts can be improved.

The research is being carried out by the Danish Center for Social Science Research VIVE and the economic advisor company HBS Economics in Denmark. So far, this has resulted in three reports that analyse what the Nordic countries are doing today and what they can improve to create better employment opportunities for four groups of citizens who are outside of the labour market: young people, seniors, immigrants and persons with disabilities. 

People at risk of being excluded from the labour market are typically divided into groups based on demography or health status. This type of division is also being used to inform employment policies. The report therefore refers to these four groups as traditional target groups.

Although Nordic employment levels are high compared to the EU average, the number of vulnerable people is sizeable. The researchers suggest that the Nordic countries must adjust their employment policies in order to help all those who are not yet employed.

Two in three face several employment barriers

According to the reports from HBS Economics and VIVE, one-fifth ((21 per cent) of employable people in the Nordics have little or no connection to the labour market, and that does not include students and conscripts. 

The first report focused on labour market attachment levels for traditional target groups in each country and found differences in employment levels between countries. It also noted a potential for countries to learn from each other. 

If all of the groups surveyed in Sweden, Denmark, Finland and Norway had the same employment level as the country with the highest level, 700,000 more people would be in employment across the four countries. 

Now, the researchers have presented a thorough study of the vulnerable group and the employment barriers they face. The report contains some new and remarkable findings. Two-thirds of citizens in the Nordics with low or no labour market connections face at least two employment barriers. 14 per cent of them face at least four employment barriers.

Vibeke Jakobsen from Vive presents the first report in Oslo 2022. Photo: Björn Lindahl

This is important knowledge that the Nordic countries should take into account when shaping their future employment policies, believes Vibeke Jakobsen, senior researcher at VIVE and co-author of the reports. 

“Our analyses confirm that large numbers of citizens with weak labour market connections face several different barriers that prevent them from finding work. We have now been able to document that this is the case for all groups who are without jobs: young and old, immigrants and disabled persons. The countries should adapt their employment measures with this in mind.”

Look at barriers rather than age

The researchers have examined reasons for unemployment beyond the groups that the countries' employment systems typically use to organise employment measures. Their analysis shows that many of the identified barriers are common for job seekers across, for example, age groups. This also ought to inform how measures are adapted, the latest research report recommends.

”Traditional demographic target groups (i.e., young people, seniors, etc.) share common barriers, which challenge their distinct categorisation. These empirical findings demonstrate that future employment policies may derive greater benefits by focusing on the specific employment barriers faced by individuals rather than relying on broad demographic categories as a shorthand for the unique challenges experienced by individuals”, the researchers write. 

Research shows that young people and seniors are often used as proxy groupings in policy discussions, assuming that these categories effectively capture distinct sets of employment barriers that can inform policy formulation and implementation (Fernandez et al., 2016). However, it is important to note that being young or being a senior, in and of itself, does not constitute an employment barrier.

Among the barriers that cut across things like age groups are ill health, lack of education, skills and recent work experience. That is why it will be crucial for the measures to distinguish between individuals who have recently been in the labour market and those who have not. 

“The simultaneous presence of these barriers amplifies the complexity of the task at hand, making it clear that a multifaceted approach is required to effectively assist these individuals in entering the labour market,” the researchers write.