Labour Market Reforms

At 74,7%, Finland’s employment rate is close to historic high levels. In their latest labour market forecast extending until 2024, the Ministry of Economic Affairs and Employment expects the growth in employment to continue, albeit slowly. Employment rates in the youngest and oldest age groups have risen particularly quickly in the past few years, but the very rapid growth in employment of the recent times is coming to an end. [Please keep reading: article continues after data.]

Increasing employment to improve medium-term growth potential and sustainability of public finances is a big policy focus for the Finnish government. The government aims at increasing the employment rate to 75% during its term and is committed to measures that will improve employment by 80,000 employees by the end of the decade.

The government aims at high employment through active measures as it seeks to prolong working careers at the beginning, middle and end. According to the government programme, raising the employment rate to 75% will require higher labour market participation of people with partial work capacity, of those with poor employment prospects, and of immigrants.

As the Finnish economy recovered rapidly from COVID-19, reducing the mismatches in the labour market has become a priority in employment policy. Unemployment rate remains at around 7% while number of unfilled vacancies is also high, though decreasing from record-levels.

Recent reforms carried out by the government: 

  • For over 55’s: Abolishing the unemployment tunnel (an early retirement pathway). The reform will come fully into force in 2023
  • Offering jobseekers more intensive and individual support by strengthening the public employment services: please see: Nordic labour market service model 
  • TE (employment) services reform by 2024, where the services will be transferred to municipalities
  • Boosting labour migration and international talent attraction (please see: Talent Boost) by at least doubling work-based immigration from current levels by 2030
  • A comprehensive social security reform by 2027 is underway. A parliamentary committee, consisting of all parties that are represented in the parliament, oversees this reform.

For a follow-up on the effectiveness of Government employment measures, please see: Ministry for Employment and the Economy

Sources:
Official Statistics of Finland (OSF): Labour force survey [e-publication].
ISSN=1798-7857.
Helsinki: Statistics Finland [referred: 10.11.2021].
Access method: http://www.stat.fi/til/tyti/index_en.html

Official Statistics of Finland (OSF): Job vacancy survey [e-publication]. ISSN=1798-2278.
Helsinki: Statistics Finland [referred: 10.11.2021].
Access method: http://www.stat.fi/til/atp/index_en.html