Labour market information

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Norway - National Level

Short overview of the labour market

 

The 2020 version of the labour market information from Norway will naturally be strongly influenced by the extraordinary situation the world is in. A situation that provides strong guidelines in terms of opportunities for work mobility, it is especially challenging for shift workers who commute between their workplace and home country. In addition, a regional reform has been implemented in Norway which means that the geographical division used in LMI (NUTS codes) has been updated and does not match the template for reporting. This is expected to be updated to LMI in 2021.

In Norway, both unemployment figures and recruitment patterns are very different from what we would see in a normal situation. The unemployment figures have also varied greatly since March 2020, and the picture is not yet close to anything that could be described as stable. The picture described is also changing very fast, and new forecasts for the future are being prepared regularly. 

It is recommended to check the links in the report for the most official and up-to-date information possible. Due to the rapid changes, characterised among other things by the introduction of separate rules for leave during the coronavirus period, it is of little value to refer to figures other than national ones. Regional figures may change very quickly and thus have limited value as a source of information when this is not updated continuously. In addition, a new regional reform that came into force in 2020 has meant that counties that are included in the reporting template have ceased to exist. It is expected that the template will be updated for reporting for 2021 and that Norway’s LMI will then be able to be delivered complete. 

In July, the NAV’s statistics presented five points that are descriptive of the situation in the labour market since March 2020.

1. Lay-offs skyrocketed
As many industries closed down in whole or in part, a landslide of lay-offs ensued. At its worst, there were 276 400 laid-off employees in Norway (in week 17). After 12 March, 358 000 employees submitted an application for unemployment benefits due to redundancy, and in addition to this, there were other lay-offs, such as students who do not register with the NAV because they are not entitled to unemployment benefits. On 23 June, 158 900 laid-off jobseekers were registered with the NAV.

2. Highest unemployment ever
Norway went from having 106 200 jobseekers registered with the NAV to 432 700 jobseekers during Easter week, which corresponds to 15.4 per cent of the workforce. The number has since fallen, and on 23 June the number was 289 000. The extreme growth in unemployment gave us our highest unemployment since the 1930s.

3. Explosion in applications for unemployment benefits
One week after 12 March, the NAV had received 183 000 applications for unemployment benefits – about 100 times as many as the same week in 2019. During the financial crisis, it took about a year before we received as many. So far, the NAV has received a total of 478 000 applications for unemployment benefits since 12 March.

4. High payments to workers
Since the COVID crisis began and up until 1 July, the NAV has paid NOK 20.1 billion to employees due to unemployment, divided into NOK 7.3 billion in wage compensation for those laid off and NOK 12.8 billion in unemployment benefits and advances on unemployment benefits. In addition, the NAV has paid 604 million to self-employed workers and freelancers.

In comparison, the NAV paid NOK 9.1 billion in unemployment benefits in 2019. Payments due to unemployment are thus already over twice the amount after 15 weeks of the COVID crisis than during the whole of 2019.

5. Large flows in and out of the unemployment queue
A total of 441 300 people have registered as jobseekers with the NAV between 12 March and now. 258 500 of these are no longer in the unemployment queue, which means that more than half of the ‘COVID unemployed’ are no longer in the unemployment queue. It also means that 182 800 ‘COVID unemployed’ are still registered with the NAV – in addition to most of those who were jobseekers before the coronavirus crisis.

Population: 5 374 807 in the second quarter of 2020.

70.1% of the Norwegian population is in the workforce (aged 15-74) as at 22 July 2020. 

At the end of April, the NAV registered 421 000 people with the status of jobseeker. Among those jobseekers, 269 000 were registered as completely unemployed, which represents 9.6 per cent of the workforce. Gross unemployment, which is the sum of those who are completely unemployed and jobseekers on measures, stood at 281 800 people, or 10.1 per cent of the workforce. 

In addition, 139 200 were recorded as partially available. Calculations show that 60 per cent of those completely unemployed were laid off, while the same applies to 79 per cent of those partially available. 

It is worth mentioning that there are two measures of unemployment in Norway. The NAV’s unemployment figures show the number of people registered as jobseekers with the NAV. Statistics Norway’s Workforce Survey (LFS) is a sample survey that maps the workforce, employment and unemployment. People without work who are not entitled to unemployment benefits or to participate in labour market measures may lack incentives to register as jobseekers with the NAV, whilst they can respond to the LFS that they are unemployed and actively seeking work. This is one of the reasons for the discrepancy between the number of people registered as unemployed with NAV and the LFS figures. In other words, if you want a picture of how many people are potentially competing for vacancies, the LFS figures can give the best picture. At the time of writing, Statistics Norway has not updated figures as a basis for comparison with the NAV’s figures from the end of April 2020. 

Developments in the Norwegian economy 

In a short time, the outlook for the Norwegian economy has changed completely. In Statistics Norway’s short-term report from December 2019, it was concluded that the Norwegian economy would be in a near-cyclical situation in the years to come. The coronavirus pandemic has meant that in the first quarter of 2020, the Norwegian economy ended up in a recession that will probably last for several years to come. A very expansive fiscal policy, lower interest rates, a record weak krone exchange rate and falling real wages are helping to dampen the effects on the labour market, according to Statistics Norway. 

Compared with Norway’s trading partners, the recovery will probably take place more quickly in Norway as a result of greater room for manoeuvre in financial and monetary policy and the fact that the krone has weakened against most currencies. Statistics Norway’s calculations have assumed that the most intrusive infection control measures will be gradually released through the second quarter of 2020, which is slightly earlier than with many of Norway’s trading partners. However, there is great uncertainty about the further course of the infection, and there may be a need to continue certain infection control measures significantly longer than we have assumed. If this happens, the recession will probably be both deeper and longer than what is now being described, all according to Statistics Norway.

 

Text last edited on: 10/2020


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