LABOUR MARKET

What kind of labour market trends are the most prevalent in the Nordic Region at the moment? How has the labour market recovered since the pandemic? Do we have the necessary skills and compe­tences to remain competitive in the future? And how is the green transition shaping the labour market? The Labour Market section tackles the latest developments of the labour market from different perspectives.

Chapter 4: The Nordic Labour Market after the pandemic

Like the rest of the world, the Nordic labour markets were severely hit by the effects of the pandemic. While COVID-19 was a shock to the labour market, its impact was much shorter-lived than that of the financial crisis. In terms of employment rates, recovery was quick, and the rate for the Nordic Region reached its highest level in at least twenty years in 2022. Sectors badly affected by the pandemic, such as accommodation and food service, bounced back, but employment rates in others have also gone up, e.g. the information and communication, public administration and defence sectors. One of the pandemic’s most visible effects on the labour market was the greater opportunities for remote work. While remote work has continued since the pandemic, most workers (63%) have still never worked from home.

Chapter 5: Challenges of labour provision and skills provision

This section focuses on ‘skills matching’ and ‘skills provision’ from a perspective of educational planning, as well as demographic and generational differences in a labour market characterised by megatrends and rapid change. While the differences in labour shortages are spread across sectors, ages and geography, the Nordic labour markets all have very high employment rates.

The report identifies three factors that cause skills’ mismatches’. Factor 1: In the last three decades, the Nordic system of post-secondary education attainment has changed significantly. University degrees used to be the almost exclusive preserve of a small, often elite and primarily urban group, but over 40% of the population are now graduates. Factor 2: Demographics or an ageing population – the ‘greying of Europe’. An ageing population also means increasing healthcare needs and more support jobs. Factor 3: Automation, digitalisation and technological adaptation are three of the most important drivers behind changes to the labour market in the Nordic Region and globally. The Nordic Region is at the forefront of efforts to maximise the potential for digitalisation and digital integration. Accessing the skills and employees necessary for this transition is crucial for national and regional development.

Chapter 6: Green transition of the labour market

New climate policies and the need for a green transition are among the megatrends impacting the labour market. This involves transitioning from jobs that contribute to high levels of greenhouse gas emissions and negative environmental effects and emissions towards jobs that support the environment and promote social equity. During this transition, new jobs will be created, others in sectors dependent on fossil fuels will be reformed or phased out. This section looks at the effects of the green transition on the labour market from a geographical perspective. It begins with a discussion of how the green transition affects the labour market and the concepts of green and brown (polluting) jobs. In 2021, 25.2% of total employment in the Nordic Region was classified as green. This is higher than the OECD average of 17.6%. Although higher than the European average, there are differences at the regional and municipal levels among the Nordic countries. The Nordic Region has a higher proportion of green and brown jobs than the EU average, which indicates that the Region is competitive in terms of green innovation, but there is still a need for structural change.