In this report, we look back at 70 years of a common Nordic labour market. We also look ahead and study forecasts of supply and demand in the Nordic labour market and discuss challenges and opportunities for increased integration of the common Nordic labour market. The report is based on descriptive statistics, document studies, a survey, and interviews.
The common Nordic labour market, which means that residents of the Nordic Region can work in another Nordic country, was formalised in an agreement between the Nordic governments in 1954. Working in another Nordic country had already been common, especially after the Second World War when the Swedish business sector had a high demand for foreign labour.
During the period studied, we find that the possibility to seek employment and improve living conditions in another Nordic country has impacted Nordic migration. In times of economic downturn and high unemployment, the opportunity to move to another Nordic country has been an option for Nordic residents. The largest flow of migrants during the period studied came from Finland to Sweden in the 60s and 70s, with more than 400,000 migrants. The second largest flow was the return of Finnish migrants from Sweden to Finland. While in absolute numbers, the migration between the Nordic countries Denmark, Finland, Norway and Sweden is greater, statistics show that residents of Iceland, the Faroe Islands, Greenland and Åland are more likely to move to another Nordic country. Here, too, the same patterns of significant return migration can be found.
In line with globalisation, increased living standards in all Nordic countries, and EU and EEA membership, which makes it possible for citizens to look for jobs throughout the EU, Nordic migration has stabilised at a relatively low level since the 1990s. The latest statistics show that close to half a million people (449,300, 2022) were born in a Nordic country other than the one they live in, which equates to 1.6% (2022) of the total population in the Nordic Region. This can be compared to the EU, where more than twice as many live in a European country other than the one they were born in (3.9%, 2021).
Among those who choose to migrate, about 20% choose to move to another Nordic country. In choosing a country to move to, geographical, linguistic and cultural proximity seems to play an important role. However, to take part in the common Nordic labour market, you can also commute, or work remotely, something that has become increasingly common after the pandemic. Studies show that about 40% work fully or partially remotely. Although commuting statistics are limited, proximity also plays an important role in both commuting and remote work.
The Nordic agreement on the common labour market is reinforced by other Nordic agreements, institutions, organisations and cross-border co-operation that contribute in various ways to supporting Nordic labour market integration. While cooperation in the legislative area dates back to the 1880s, extensive institutionalisation of Nordic co-operation took place in the 1950s and 1960s (e.g. the Nordic Council in 1952, the social security agreement in 1955, the passport union in 1958 and the Helsinki Treaty in 1962), which has since been supplemented by further cooperation, declarations and institutions to facilitate free movement and increased Nordic integration. In the area of business and industry, the Nordic countries are also important trading partners with extensive cooperation. Despite this, many studies show that various barriers to freedom of movement, including tax legislation, social security and problems with electronic identification, have an inhibiting effect on increased labour market integration. But other obstacles are also highlighted, such as language barriers and difficulties for families to move. It is important to note that these barriers not only have a bearing on migration to another Nordic country, but also constitute significant obstacles when commuting and working remotely.
Looking ahead, the forecasts show that the working-age labour force (16-64 years) in the Nordic countries is expected to increase s, even as the overall labour force ages. Although employment is generally high in the Nordic countries, we find large regional differences. We also find large regional differences in the working-age population and level of education. The labour force that is expected to be in demand in 2035 is primarily highly educated. The labour market sectors that are expected to grow the most are business and other services and the public sector (non-marketed services). Although there are national and regional variations, the forecasts show essentially similar patterns between the Nordic countries. With a high demand for similar labour within the Nordic countries, and perceived administrative barriers to move or take a job in another Nordic country, we find few indications that labour mobility in the Nordic countries will increase in the near future - unless major efforts are made to increasing the attractiveness of living and working in another Nordic country and reducing barriers to freedom of movement.
In the final chapter of the report, we challenge the current state and ask the "What if...” questions . We advance perspectives and ask questions such as "What if the Nordic region was without internal borders?" What would this mean for the common Nordic labour market? "What would a fully integrated Nordic Region look like? “,"What strategic Nordic infrastructure needs to be put in place to make it more attractive to live and work in another Nordic country?" And, finally, with a focus on the next generation, "What would Nordic cohesion for the next generation look like?".