Labour Market as a Vehicle for Social Inclusion

Thank you chair. 

Dear colleagues and honoured guests; I am very pleased that I have the chance to attend this meeting and share views concerning make-work-pay measures from a Norwegian perspective. 

The share of households with low income is very low in Norway. Our compressed wage-structure and the design of our welfare system contributes to this. As the level of social benefits paid out is calculated on the basis of previous income, employment constitutes more of a guarantee towards poverty and social exclusion in Norway than in many other countries. Both unemployment benefits, sickness benefits, disability benefits and old age pension are based on previous income.

To stimulate to participation in the labour market, we put an emphasis on activity measures in our welfare schemes. Those furthest from the labour market will often be in need of tailored services and closer follow-up to enter or return to the labour market. The Norwegian Labour and Welfare Administration is designed to provide integrated services to those who are in need of assistance.

The Norwegian Government is fully committed to prevent young people from falling outside the labour force. Our main challenges are the share of young people dropping out of secondary education, and an increase in the numbers of young people on disability benefits, often diagnosed with mental problems. Our current youth guarantees have not had the effects as they were intended to have. Therefore, we have this year decided to replace our current guarantees with a more targeted and concrete initiative. 

Instead of promising our youth an activity plan, as before, they will under the new system be more quickly engaged in activities that should lead them into work or education. We go from plan to activity and action! This priority initiative is offered to young people under 30 who do not have a job offer, and do not attend school or other activities eight weeks after being registered at the PES (Public Employment services). The aim is to quickly ensure these young people appropriate follow-up and personalized services - promoting education, work, or other activities, including labour market training and vocational training.  

In order to strengthen the opportunities for entering a job and become self-supported, we have in addition from this year implemented a nationwide requirement that municipalities should set conditions of activity for recipients of social assistance younger than 30 years old. 

Another step we are about to take, is the revision of the so called Work Assessment Allowance. This benefit is granted to persons whose working capacity is reduced due to illness or injury, and is granted when the person is undergoing active treatment or vocational measures. It is a temporary benefit, and to limit the welfare dependency we will tighten the entrance criteria and restrict the period. The Work Assessment Allowance will be shifted towards including more work related activities and a closer follow-up by the PES. The revision aims to strengthen the beneficiaries' work incentives - and to increase the number of beneficiaries that comes back to work – full or part time.

Thank you for your attention.