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Besides the primary sectors in Norway, there are two expanding businesses demanding unskilled or semiskilled labour, the fish farming production chain, and the nature-based tourism sector. (Photos: Terje Rakke / Visitnorway.com and iStock)

7. NORWAY

Introduction

Since the early 1990s, Norway’s labour market has largely seen full employment and high rates of occupational participation, with unemployment only exceeding 4% for short periods. As of February 2024, Statistics Norway placed the country’s unemployment rate at 3.8%. Surprisingly, however, the region with highest unemployment rate is the Oslo (capital) region (4.1%), while the corresponding percentage for Northern Norway is 2.7% (SSB 2024).
With this in mind, the following sections set out the historical backdrop to Norway’s labour shortages, before going on to explore the present situation and strategies available to counter rural labour shortages. The analysis is based on the available statistics, scientific literature and relevant policy documents.
In particular, two documents have proved invaluable to this report: Distriktssenteret (2020) and Kommunal- og distriktsdepartementet (2023).
‘Rural labour shortages’ have traditionally been discussed in the context of seasonal labour, primarily in agriculture, as well as – in Norway’s case – seasonal fisheries. Today, however, rural labour shortages pose challenges even when it comes to filling full-time positions in primary production, the manufacturing industries, and public and private services. While acknowledging the issue of supplying seasonal labour remains, this chapter’s focus is on recruiting personnel for full-time jobs.
Today’s situation is the inverse of what has traditionally been the case in Norway’s rural areas, which used to be subject to high unemployment rates and out-migration. This was due both to high birth rates and limited job opportunities in agriculture- and fisheries-dominated local economies. The country’s urban areas, by contrast, were able to offer jobs to incomers. In response to this situation, a strategy of modernising the periphery through industrial development was pursued (Teigen 2019: 44). Thus, national-level regional policies have long sought to create new jobs in order to reduce rural unemployment and counter large-scale rural-to-urban migration.
The United Nations Food and Agricultural Organization (FAO) observes that, at the global scale, underemployment still dominates the rural scene: ‘Over three quarters of the world’s poor live in rural areas and many of them depend on agriculture to make a living. More and better employment opportunities will need to be created for rural populations’ (FAO, 2024). As the data presented in this chapter indicates, however, this focus on increasing the number of rural job opportunities is no longer pertinent to the situation in Norway.
The country’s rural regions and municipalities are at present in need of people to fill a variety of vacant positions, including in agriculture. One issue is that rural birth rates have dropped, meaning less young people are entering the rural labour force. In theory, this should not pose a significant problem, as wide-scale mechanisation in agriculture and fisheries means there are now far less jobs available in Norway’s primary sectors. In reality, however, Norway’s rural economy swelled and became more diversified towards the end of the 20th century, largely due to the expansion of the decentralised welfare state and its in-person services, as well as the growth in private (non-agricultural) sectors.
Another relevant trend is that young people in rural areas no longer find industrial employment attractive compared to jobs requiring higher education. As a consequence, Norway’s revolution in access to higher education institutions – generally located in urban centres – has over recent decades drained many rural areas of young people. Graduates are also more likely to settle in the urban centre where they studied, as it is generally easier to find a desired job there than seek a high-skilled job in rural areas. Overall, the growing preference for urban living, especially among young people, seems set to continue, driven by the growth in educational (particularly university-level) opportunities and expansion in research and development (R&D) employment.
Even if today’s rural municipalities can offer jobs to highly qualified people, as well as affordable and spacious housing, they cannot compete with cities when it comes to providing highly-skilled people with a larger, more diversified working environment. Given the current emphasis on climate policies, living in a densely populated (urban) environment may also be preferred due to the lower emissions generated by work and everyday activities.
Against the above backdrop, Norway’s rural areas face a twofold recruitment problem: firstly, there is a shortage of local people available or willing to work in the industrial and primary sectors; and, secondly, it is proving difficult to recruit people to fill key positions (mainly public sector jobs demanding a higher education).
Nils Aarsæther, prof. emer.
Department of Social Science, UiT, The Arctic University of Norway, Tromsø

Methods and approach

Demarcating ‘rural Norway’

Traditionally, Norway’s rural areas have been conceived of as dominated by agriculture and fisheries. Today, however, employment in primary production accounts for only a minority of total employment in such areas. Instead, the expansion of the local welfare state means the public sector is responsible for the majority of positions, even in the most peripheral municipalities.
From an employment statistics perspective, the country’s rural areas are now almost indistinguishable from its cities: the labour force is dominated by tertiary occupations, and unemployment rates are generally low. Nevertheless, discriminating between rural and urban areas makes analytical sense, as the former are located in the geographical periphery where settlement densities are far lower, involving vast areas of land per capita.
Studying development in ‘rural areas’ poses some methodical problems, as many administrative units – from which statistical data is derived – include both urban and rural areas. For instance, some large municipalities include a distinct urban centre surrounded by villages and farming areas (e.g. Tromsø in Northern Norway). The same issue applies to Norway’s counties (‘fylker’ in Norwegian), which – apart from Oslo – are made up of relatively large urban centres plus rural municipalities that cover large areas but have small populations. Regional-level statistics on labour shortages therefore conceal the true extent of the urban/rural divide, despite some regions being more rural than others. In the latter regard, Norway’s three northernmost counties (Nordland, Troms and Finnmark), alongside Innlandet in the south, are the four most rural regions, while the country’s other seven regions are relatively more urban.
Studying rural labour shortages in Norway thus benefits from a case-based approach capable of taking into account the diversities, contexts and micro-level strategies involved. In this respect, Norway’s municipal structure represents an obvious advantage: the vast majority of the country’s 357 municipalities can be classified as ‘rural’ – that is, located in the geographical periphery with a decentralised settlement structure. Here, the ‘centrality index’ developed by Statistics Norway, which groups the 357 municipalities into six categories ranging from most central (level 1) to most peripheral (level 6) (Høydahl 2020), offers a suitable means of capturing the country’s rurality as it currently stands.
The argument for utilising this classification rests on the importance of geographical distance for understanding and handling labour recruitment problems. Municipalities classified as belonging to levels 5 and 6 are the most peripheral, and are routinely regarded as constituting the rural scene in Norwegian regional analysis and politics. Today, municipalities classified as level 5 (96) and 6 (113) comprise 209 of Norway’s 357 municipalities.

Micro-level and macro-oriented strategies

The handling of rural labour shortages is multi-faceted. At the (most) micro-level, family-based units in agriculture typically expect a son or daughter to take over the farm. In addition to family recruitment, smaller enterprises utilise local community networks to recruit personnel. Moving up a step, many expanding firms seek to recruit workers from Eastern Europe to work (often temporarily) in rural areas. Public (mainly municipal) services in rural areas are, meanwhile, often forced to offer higher wages or allow key personnel living in urban areas to commute in for intensive work periods, and engage in remote working, resulting in an impoverished local work environment.
As the above implies, most of the micro-level strategies for dealing with labour shortages developed by family-based productions, businesses and public agencies are informal and so may be regarded as beyond the scope of political or organisational interventions. Nevertheless, informal recruitment strategies should be borne in mind, for example in the context of variations in a municipality or firm’s networking capacity. The stock of social capital available at the local community level is important in this context: places with a rich civil society produce overlapping social networks, which enhance the distribution of information (e.g. about upcoming job vacancies) and provide a template for cross-sectorial cooperation and problem-solving (Putnam 2000).
While the primary focus of this chapter is national and regional strategies for coping with rural labour shortages, strategies deployed at the municipality level or the level of branch/sector organisations (e.g. the Farmer’s Union, the NHO/Confederation of Norwegian Enterprise) are also of relevance. Thus, when analysing Norway’s rural scene, one can observe responses to, and the effects of, formal strategies developed at a central, regional, municipal and business organisational level, as well as at the level of the household-as-producer.
Finally, in setting the scene for this chapter’s analysis, it is important to note the rural municipality’s twofold role: firstly, in demanding (qualified, skilled) labour, and, secondly, as strategy developer and actor in the wider field of labour recruitment.

Regional and rural labour shortage variations

Updated statistics from NAV (the Norwegian Labour and Welfare Administration) show a surprisingly low variation between Norwegian regions, irrespective of location or population size (NAV 2023: 7–8). Overall, 22% of businesses that responded to NAV’s 2023 questionnaire had a labour recruitment problem, ranging from 18% of businesses in Oslo and its environs, to 25% in Nordland and 28% in Troms and Finnmark in Northern Norway (NAV 2023: 7–8). In Southern Norway, meanwhile, the percentage (discounting the Oslo region) was close to the national average. Broadly speaking, therefore, Norway’s labour shortage problems are most acute in the rural north, and of least significance in the capital region.

The urbanisation/education nexus

One obvious driver of the situation outlined above is the ongoing mobility of young people leaving rural municipalities in the north to study or work in the Oslo region. While such mobility could previously be explained by a lack of local job opportunities in the north, this is no longer the case. Today, Northern Norway offers a wide range of job types in the municipal sectors, as well as in fish farming and tourism. However, with young people increasingly motivated to undertake higher education, which generally requires attending institutions based in larger cities – Oslo especially offers a wide range of educational programmes – the process of rural-to-urban migration continues. This is reinforced by the fact that young people moving to larger cities are unlikely to make a permanent return to the rural municipalities they came from. As a consequence, when a descendent eventually take over their parent’s house or property, it tends to be utilised for the purposes of leisure or vacations. For decades, rural municipalities and local business leaders have unsuccessfully attempted to address this problem of out-moving, non-returning young people seeking higher education.
The overwhelming urban bias of Norway’s higher educational system represents an ongoing issue for the country’s rural municipalities. At the same time, the easy access to higher education presented by generous grants/loans and public student housing provides advantages to both society at large and the individual. Rural municipalities themselves stand to benefit in terms sourcing people to fill vacancies requiring higher education qualifications – something that is increasingly the case in their diversified local economies. Even so, the mismatches evident in the current system (highly educated youths seldom apply for appropriate jobs in their home municipality) need to be resolved, without questioning the validity of the educational system as such.

New jobs: Fish farming and year-round tourism

Another aspect of the rural labour market is the demand for unskilled or semi-skilled labour, typically in agriculture and fisheries. Besides the primary sectors, there are two expanding business areas demanding this form of labour: the fish farming production chain and nature-based tourism. Fish farming has undergone enormous expansion in recent years, especially in remote rural areas. As a result, the fish farming production chain (e.g. in the 41 salmon slaughterhouses along the coastline; in smolt production; on fodder supply ships; monitoring the fish; R&D; financing; truck-driving to export markets) is now estimated to account for at least 10,000 jobs (Nofima 2023), most of which are in rural (coastal) areas.
An expansion in (mainly) air-borne winter tourism – and the attendant proliferation of driving, catering, guiding and lodging activities – has turned what were previously seasonal jobs into full-time occupations. Moreover, the expansion of the second homes industry in rural areas has led to increased demand for construction workers, as well maintenance and infrastructure work.
In sum, low birth rates and an ageing population, combined with expanding access to higher education, have drained rural communities of what was once regarded as an unproblematic supply level of unskilled and semi-skilled workers. The expansion of the labour market to include all European Union (EU) countries has, however, ameliorated this situation. While some of these labour migrants come for shorter periods, others have decided to relocate themselves in Norway, and not few are weighing the possibility of moving permanently to a rural municipality with their families in this respect, the improvement of living conditions in some East European countries may impact on the recruitment situation for periphery municipalities in Norway.

Elderly care

Recruitment problems vary more between localities/municipalities than between regions. Although some peripheral municipalities have managed to stabilise their workforce in vital sectors – for example, the local school system or elderly care system – others continue to experience rapid staff turnover. The elderly care sector in particular is growing, with rural municipalities all hosting a high proportion of elderly people in their populations. Even so, services for the elderly are assessed by inhabitants as being better in small municipalities compared to the larger cities (Christensen 2020; DIFI 2015). At present, employing immigrants/refugees alongside local unskilled and semi-skilled personnel appears to rural municipalities’ favoured approach to satisfying labour demand in this sector. Refugee centres are located in some (though not all) municipalities, potentially providing labour to local municipal services, as well as local industries.

Green sector demand

While some municipalities have managed to attract new private industrial enterprises in the green energy sector, large-scale industries demand more labour than can be provided locally or even regionally. As such, they have to rely on workers coming from abroad.

Strategies and actors

In answering the question of what strategies and solutions to rural labour shortages exist in Norway, we present a simple conceptual model that, as a first step, acknowledges the existence of actors on six levels. These range from the national government level (1) to family-based production units performing informal strategies (6) (see Table 7.1).
Furthermore, the model distinguishes between direct and indirect strategies aimed at addressing rural labour shortage. Direct strategies address the potential group(s) to be recruited, whether local ‘reserves’ or ‘recruits’ who can be mobilised and/or upgraded for local work, or targeted groups that can be convinced to come and work in a rural municipality/area. By contrast, indirect strategies are premised on the idea that jobs and local contexts are intertwined, meaning strategies aimed at nurturing community environments are decisive for recruitment.

Actors: A multi-level approach

Below, we present six actor types that contribute to the handling of rural labour shortages in Norway. In each case, the strategies highlighted are of a more general nature, while the ‘measures’ and ‘solutions’ demonstrate how these strategies are operationalised.
As shown in Table 7.1, five of the six actor types have developed both direct strategies aimed at influencing the occupational and locational choices of individuals/groups in favour of rural areas, and indirect strategies designed to create a rural environment attractive to long-term habitation (and therefore work). The following sub-sections explore the categories presented in Table 7.1 in further detail.
Actor/Institutional level
Direct strategy example(s)
Indirect strategy example(s)
National government
Flexible education; refugee resettlement
Affordable rural housing programme
Regional authority
Apprenticeship/trainee programme in secondary education
Strengthening vocational schools; rural/urban access (roads, public transportation)
Municipal authority
Wage incentives; information; back-moving campaigns; refugee employment
Place attractiveness projects; housing strategies; place-adapted collaborations between actors
National business organisations
Information and brokering directed towards labour migrants
None
Firm or single business (informal) strategies
Recruitment firms; Eastern Europe focus; network transactions across national borders
Projects for family housing
Household-as-producer (informal) strategies
Community networking
Workplace environment; civil society social integration
Table 7.1. Actors and types of strategies aimed at combatting rural labour shortages in Norway.

National-level government strategies and measures

In Norway, the Ministry of Local Government and Regional Development has national-level responsibility for rural and regional development. Given that rural labour shortages encompass a broad range of policy areas (e.g. education on several levels, employment, business, housing, agriculture), the Ministry’s role is largely geared towards coordinating public efforts rather than being a direct actor.
This coordinating role is explicitly expressed in the ‘District and Regional Policy Reports’ to the Norwegian Parliament, issued every four years, the latest having been submitted in 2023 (Kommunal- og distriktsdepartementet 2023). These reports offer a broad overview of regional development issues, thereby preparing the ground for the funding and implementation of both established and novel strategies. In the 2023 report, the challenge of rural labour shortage is highlighted as follows: ‘In many rural municipalities, the biggest challenge today is not a lack of jobs, but that public and private enterprises lack the labour they need’ (Kommunal- og distriktsdepartementet 2023: 10, English version).
The strategies proposed by the Ministry are threefold: 1) target people already living in rural areas; 2) bring outside people into rural areas; and 3) nurture local living conditions that are conducive to attracting people into rural areas, and encouraging them to stay once there. Whereas the first two strategy types can be collapsed into the direct category, the third covers indirect ‘attractivity’ strategies.

Direct strategies

  • Decentralised (flexible) higher education: One of the Ministry’s main focuses is on offering people living in rural areas access to higher education in order to enable better matches between available human resources and the local demand for labour. Towards this end, universities and colleges, as well as decentralised ‘study centres’, will be encouraged to develop flexible programmes aimed at educating – among other key professions – prospective nurses, kindergarten personnel and schoolteachers.
  • Into work mobilisation: Early retirees, partially disabled people and young dropouts will be given assistance by the NAV to enter local labour markets.
  • Targeting of graduates, European Economic Area (EEA) residents and refugees: The Ministry’s targeting of incoming people encompasses three categories of potential workers: 1) young people who have recently completed university or college degrees and are seeking highly-skilled employment; 2) Eastern Europe residents seeking employment in the rural industries; and 3) refugees being resettled in the countryside. In the latter case, the Ministry proposes more rapid settlement of refugees in rural areas, evidently with the hope that at least some will settle permanently. In the case of recent graduates, a number of measures are proposed (alongside several that have long been practiced), including enhancing the existing relief scheme for student loans, and (from August 2024) providing free kindergarten services for parents living in ‘the action zone’ (comprising Finnmark, plus the seven northernmost municipalities in Troms county).

Indirect strategies

  • Affordable housing measures for rural areas: Given that Norway’s rural areas have experienced decades of out-migration, in would be natural to assume that young people (and others) moving to such areas will have easy access to housing. In reality, however, this is not always the case, as those who have migrated from rural areas often keep their properties for leisure and vacation use (including short-term rentals to tourists). The Ministry therefore intends to strengthen the rural profile of the Norwegian National Housing Bank through a special housing grant scheme that prioritises rural municipalities, ‘especially at centrality level 6’. Moreover, the national planning guidelines ‘will open up the possibility of facilitating new housing in sparsely populated areas’ (Kommunal- og distriktsdepartementet 2023: 13, English version).
  • Proximity to public services: Despite long distances and small populations, basic services – including primary education, childcare and elderly care – are well developed in small municipalities (Christensen 2020). More advanced services, such as those provided by doctors and psychologists, have, however, been negatively affected by the difficulty of recruiting personnel to small municipal units. As such, the Ministry intends to stimulate inter-municipal cooperation as a means of making advanced services more accessible to those living in rural areas.
  • Infrastructure and transportation: While living in the periphery is now partly compensated for by access to high-quality digital communications, personal mobility – especially for in-moving people – remains essential. Access to safe roads airports, ferries, harbours and public transportation are all potentially decisive factors when an ‘outsider’ considers the prospect of rural living. The Ministry is attempting to surmount these obstacles by, among other things, providing free ferry transport for smaller islands, as well as subsidies for regional flight routes.

Regional-level strategies and measures

Norway’s regions (‘fylkeskommune’ in Norwegian) have various road-tested means of handling the problems faced by rural municipalities, including administering development funds, bearing responsibility for secondary education, and managing regional roads and public transportation. Thus far, however, the rural labour shortage problem has not been explicitly addressed, although regional authorities have tried to tackle the problem of low attendance rates in vocational education classes.
The regional authorities have responsibility for both urban centres and rural areas. As such, any decisions they make regarding, for example, investments in education or transportation will indirectly impact rural labour shortages. Thus, a transportation system set up to facilitate job-related travel from rural areas into cities may now ironically provide opportunities for job-related travel in the opposite direction.
The vocational school system administered by regional authorities needs to be geared more towards providing rural areas with skilled and semi-skilled labour. On this point, a recent report evaluating the regional competencies policy concludes that regional authorities are primarily concerned with the need for qualified labour in general, and not particularly the needs of rural areas. (Samfunnsøkonomisk Analyse 2022: 17). Even so, the strengthening of the vocational school system as part of the national-level strategy outlined above will inevitably have a positive effect on recruitment both to the public sector (health, education) and private businesses (technical education) in rural areas.

Municipal-level strategies

Most rural municipalities in Norway have, over recent decades, developed a diversified public sector labour market in which the majority of positions require higher education (e.g. teachers, kindergarten staff, health sector workers, administrators, IT support, planners, technical staff, carers for the elderly, clergy, police). The private sector, meanwhile, is typically made up of household units in agriculture and fisheries, plus employment in primary-, secondary- and tertiary-sector business enterprises, which demands a variety of qualification types and levels. Some municipalities host high-tech operations, while others do not. This means that although the profile of public sector employment is largely identical across all rural municipalities, private sector demand for labour varies substantially according to local business circumstances. In this respect, some rural municipalities are facing a period of industrial recession, and others periods of stability or expansion.

Direct strategies

The municipality’s dual role is challenging when it comes to direct strategies, as the administration must fill vacant positions in its own service systems while also assisting private businesses to recruit labour. A report from Distriktssenteret (2020) highlights two strategies that are likely to have a positive effect on labour recruitment: firstly trainee programmes aimed at both local youths and youths from the region (also Bachelor’s and Master’s degree-level candidates), with apprenticeships organised in the local public or private sector; and, secondly, programmes enabling the employment of refugees. In the latter case, the national resettlement policy for refugees offers a potential means of addressing labour shortages in rural municipalities.

Indirect strategies

In 2023, the Ministry of Local Government and Regional Development issued a report (the previously mentioned District and Regional Policy Report) entitled ‘A Good Life Throughout Norway’ (Kommunal- og distriktsdepartementet 2023). The objective implied by the report’s title cannot be achieved unless municipalities successfully develop attractive local communities through place development strategies. The notion of a ‘good life’ encompasses – in synergistic ways – job, house, neighbourhood, family, network, services and leisure opportunities. In rural areas, distances and dispersed farms and dwellings often work against social interaction and community inclusion.
The Distriktssenteret (2020) report also highlights the potential for compact ‘semi-urban’ centres designed to host shops, public services, inter-generational meeting places, sports and cultural scenes. Here, the challenge is one of creating a social environment capable of strengthening local identity while also conveying a sense of urban modernity. Such centres will not only enhance the well-being of local people, but aid labour recruitment by giving incoming teachers, nurses, administrators and economists a positive impression of the place they are being recruited to, potentially inducing them to remain for a longer period than they initially intended.
Any attempt to convince highly educated people and their families to settle permanently (or at least over the longer term) in rural areas requires strategies conducive to community inclusion and participation, as well as envisaging the potentials for regional, national and international (physical) contacts. Creating and implementing such place development strategies demands collaboration between the municipality, private actors and voluntary organisations. Collaboration of this kind can occur both through informal networking (‘development networks’) and participatory planning practices.
Municipal housing policies are also crucial for attracting workers to and then retaining them in rural areas. While national policy (‘stimulating Husbanken to plan finance rural dwellings’) is important in this regard, ultimately it is the municipalities that implement housing policy. Thus, several municipalities have set out plans for more small and family-size houses in the hope that this will enhance attractivity and in turn labour recruitment (Distriktssenteret: 15).
The countless variations in how rural municipalities work make it difficult to specify the most effective strategies for recruiting personnel. In most cases, a municipality works with central-level agencies, local businesses, local voluntary organisations and even individual ‘social entrepreneurs’ to enhance attractiveness (indirectly) and engage with target groups (directly).

Branch or sector organisational strategies

National-level business and agricultural organisations are well aware of their members’ problems in recruiting labour. Agricultural organisations in particular provide members with information on ‘how to recruit labour from abroad’, including exploiting the potential of EEA arrangements between Norway and the EU. Such strategies are of the direct type.

Industrial actors’ twofold (direct) strategies

The EEA framework has, in the wake of the EU’s eastward expansion, offered opportunities for recruiting Eastern European labour to Norway’s expanding rural-based industries (mainly fish farming), as well as longer-standing rural industries within fishing and agriculture. The latter industries had for decades experienced severe problems in recruiting local people – a situation that changed dramatically after the EU expansion in 2004.
Over the 15-year period following this labour market enlargement, the share of foreign workers in Norway’s fishing and the fish farming industries (regular jobs) rose from 12% (in 2003) to more than 50% in 2018 (Henriksen 2020: 231). Here, firms have pursued two strategies for recruiting Eastern European workers: firstly, buying services from recruitment firms; and, secondly, recruitment via informal networking, facilitated by the relationships firms have established over time with seasonal workers. Informal networking is also used to recruit young people locally, as there will always be some who do not wish to pursue a career dependent on higher education.
The strategies implemented by firms (and farming households) are mainly oriented to the labour market and therefore direct. Over time, however, firms may consider the potential of creating an attractive work environment. In particular, medium-sized and larger firms may pursue a strategy of making family dwellings available, thereby encouraging workers to plan for a longer-term future in the local community.

Concluding remarks

Overall, the data and perspectives presented in this chapter suggests that an indirect strategy of enhancing place attractiveness – steered by the rural municipality in its role of ‘community developer’ – is the most effective way of coping with Norway’s rural labour shortage problems. Such an approach necessitates cooperation with local industries and voluntary organisations; support from regional and national centres of local community expertise; and, inevitably, financial contributions.
At the same time, direct (formal and informal) strategies at the national, regional and local levels remain important. Here, a combination of efforts are needed to address labour shortages, starting with the following:
  • Mobilising and upgrading local ‘reserves’;
  • Strengthening vocational education;
  • Stimulating and facilitating back-migration;
  • Providing adequate housing for incoming labour;
  • Mobilising refugees for local labour market participation; and
  • Ensuring socially sustainable immigration.
Crucially, in the absence of place attractiveness strategies that hand rural municipalities a central role, any direct strategy (or combination of strategies) is only likely to be of short-term value.

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