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Historisk arkiv

The Norwegian Labour Market 2000

Historisk arkiv

Publisert under: Regjeringen Stoltenberg I

Utgiver: Arbeids- og administrasjonsdepartementet

There is an increased focus on employment policies in the European Union after the adoption of the Amsterdam Treaty. This report aims to make information on Norwegian employment and labour market policies more accessible to an international audience.

The Norwegian Labour Market 2000Following the increased focus on employment policies in the European Union after the adoption of the Amsterdam treaty, this report aims to make information on Norwegian employment and labour market policies more accessible to an international audience.

The Norwegian Labour Market 2000

1.0 Introduction

2.0 The Norwegian Economy

2.1 The Norwegian economy and labour market in perspective

2.2 Recent trends and developments

2.3 Economic policy

3.0 The Labour Market

3.1 Labour market developments

3.2 Labour market policies

3.3 Equal opportunities for men and women

3.4 Long-term unemployed

3.5 Vocationally disabled

3.6 Immigrants’ participation in working life

3.7 The need for labour - placement activities

3.8 Labour market programmes

3.9 Unemployment benefits

4.0 Structural Policy

4.1 Industrial and structural policy

4.2 Co-operation with the social partners

4.3 Labour law

4.4 Social insurance schemes and pensions

5.0 Raising the Quality of Human Capital

5.1 Efforts aimed at young people

5.2 Efforts aimed at the ageing workforce

6.0 The Public Employment Service

6.1 Principles and methods for users of the services of the PES

6.2 A new quality management system and increased customer focus

6.3 The new payment services of the PES*

6.4 The European labour market and international co-operation*

6.5 Some main targets for the Public Employment Service for 2000*

7.0 Facts about Norway*

8.0 Annex*


Full employment has for many years been a main goal for Norwegian governments. We therefore welcome the increasing focus on labour market issues on the international arena, as in the European Union and the OECD. Following the increased focus on employment policies in the European Union after the adoption of the Amsterdam treaty, the Ministry of Foreign Affairs has taken the initiative to make information on Norwegian employment and labour market policies more accessible to an international audience. The social partners have also stated the same interest.

As part of the European Economic Area, a well functioning labour market throughout Europe is also in Norway’s interest. We believe that the exchange of information and best practices is an important contribution for improving the level of employment and working conditions. By producing this report, we hope to make a contribution to the dissemination of ideas and practices concerning labour market policies.

This report is written by the Norwegian Ministry of Labour and Government Administration, but contributions and comments from other involved ministries as well as the social partners are also taken into account.

Morten Reymert

Director General

Department of Labour

Ministry of Labour and Government Administration

July 2000

2.0The Norwegian Economy

2.1The Norwegian economy and labour market in perspective

Norwegian manufacturing has traditionally been based on exploiting natural resources. Natural conditions such as access to hydro-electric power, abundant forest and fisheries resources and petroleum deposits are reflected in the country's industrial structure. Power-intensive manufacturing sectors such as metal production, industrial chemicals and wood processing account for a significant share of Norway's export-oriented industry. Shipbuilding and offshore platform construction are other major sectors while other engineering industries, such as the manufacture of electrical and electronic goods, have taken on increasing importance in recent years. Fish farming is a relatively new export industry which has boomed during the last 15-20 years.

The growth of the petroleum sector following the discovery of oil on the Norwegian continental shelf at the end of the 1960s has had a major impact on the development of the Norwegian economy. Since oil production started in the early 1970s and up to today, its scope has increased substantially. Norway is now the seventh largest oil-producing country in the world and was the world's second largest oil exporter in 1998. The volume of production remained virtually unchanged from 1998 to 1999, while the value of oil and gas production increased by 37 per cent, reaching NOK 186 billion. The export value of oil and gas was a good NOK 161 billion last year.

Norway has nevertheless a diversified industry structure. About three-quarters of the economy consists of service sector industries, which include hospitals, schooling, housing, banking and insurance, transport and communications and public administration. Petroleum-related activities, including crude oil and gas production, made up 11 per cent, while manufacturing accounted for about 12 per cent of GDP in 1999.

As a small country, Norway has derived major advantages from international trade. Its economy is open, with per capita foreign trade that is one of the highest in the world. Exports of goods and services accounted for 39 per cent of GDP in 1999, while imports accounted for 33 per cent. Exports of oil and gas constituted just over a third of total exports. Approximately 77 per cent of Norwegian exports go to EU countries, while a good 68 per cent of imports come from these countries. Exports to the USA are at the same level as those to Asia, but imports from Asia are significantly higher than those from the USA. The Nordic countries, the UK and Germany are Norway's most important trading partners. The UK and Germany are major markets for Norwegian oil and gas.

2.2 Recent trends and developments

Considerable periods of the 1990s were characterised by strong growth in the Norwegian economy. The third and most pronounced cyclical upswing since World War II began in 1993, while the peak was passed towards the end of 1998. After several years of sluggish growth, conditions in the Norwegian economy gradually pointed to a considerable turnaround in 1993. For several years, price and cost inflation was lower than that of Norway's trading partners, resulting in a marked improvement in cost competitiveness. From 1993 to 1999 Norwegian mainland GDP (GDP excluding the petroleum sector and international shipping) increased by more than 20 per cent, or 3.2 per cent as an annual average. Overall GDP, which also includes oil and gas operations, increased even more. Employment rose by more than 12 per cent in the same period, and unemployment, which by Norwegian standards was very high at the start of the 1990s, was halved.

In the years 1993-1998, strong job creation contributed to a significant increase in the employment rate and unemployment fell. In 1999 unemployment was down to 3.2 per cent. At the same time, cost pressures for a long period remained subdued due to a flexible response in the labour market and low imported inflation. However, increasing imbalances in the labour market contributed to substantial wage growth in 1998, at about twice the rate recorded by Norway’s main trading partners.

The growth rate in the Norwegian economy slowed noticeably towards the end of 1998 and has now been replaced by a period of slower growth, primarily as a result of a steep fall in investment in the oil sector and large parts of the mainland economy.

Mainland GDP growth slowed from 3.3 per cent in 1998 to 0.8 per cent in 1999. The growth in employment also came to a halt in the second half of 1998 and employment remained virtually stable through 1999. From the second half of 1999 growth resumed, and for 2000, a modest rise in mainland GDP growth is projected as export growth picks up and the decline in investment comes to a halt. Private consumption will provide a solid impetus to growth both this year and next. Despite the lower growth rate, capacity utilisation in the Norwegian economy is still high, leading among other things to a shortage of labour in some sectors of the economy.

The economic prospects vary between different sectors of the mainland economy. On the one hand, the production outlook in manufacturing appears to be weak, partly reflecting the projected contraction in petroleum investment in 1999 and this year. On the other hand, the growth outlook remains favourable for service sectors and other industries, which primarily supply goods and services to the domestic market.

Employment growth is expected to be moderate this year. The unemployment rate remained unchanged from 1998 to 1999 at 3.2 per cent, and is projected to increase to 3.6 per cent in 2000 and 2001.

Consumer price inflation is forecast to rise from 2.3 per cent in 1999 to 2.6 per cent in 2000.

The current account of the balance of payments is projected to show a surplus of more than NOK 150 billion in 2000 (11 per cent of the GDP). These forecasts are based on an oil price assumption of NOK 190 per barrel in 2000.

2.3Economic policy

Until the late 1980s unemployment was low by international standards. However, from 1987 unemployment rose following a strong and unsustainable upswing in the economy from 1985. In the late 1980s and early 1990s, the Norwegian economy was characterised by sluggish economic growth, deteriorating competitiveness, with companies losing market shares, and an increasing unemployment rate. The number of unemployed persons rose from 45 000 in 1987 to 126 000 in 1992.

In the autumn of 1991 the Government appointed an Employment Commission with the aim of reaching an overall consensus on guidelines for employment policies between the social partners and the main political parties. The Commission submitted its recommendations in the summer of 1992. The Commission was broadly represented, including government representatives, representatives of the political parties, the Norwegian Confederation of Trade Unions (LO), and the Confederation of Business and Industry (NHO). Both the Government and the social partners adopted the main recommendation of this Commission – the so-called Solidarity Alternative.

The main elements in the Solidarity Alternative Framework can be summed up in the following four points:

  • A platform for co-operation between the Government and the social partners on co-ordinated wage formulation in order to contain inflation. In 1992, it was agreed that the objective should be to achieve lower nominal wage increases than the level in our main trading partner countries, thus improving the Norwegian business sector’s competitiveness. After an improvement from 1992 to 1994, the ambition since then has been wage growth at the same pace as that of industries in other countries.
  • Fiscal policy used actively to stabilise activity in the economy.
  • Monetary policy at a stable exchange rate towards European currencies. It is recognised that low and stable inflation is a fundamental precondition for exchange rate stability.
  • An active labour market policy aiming at facilitating structural adjustments, reducing adjustment costs and maintaining the unemployeds’ contact with the labour market. This requires a well-developed information system to match vacancies and the unemployed, and comprehensive programmes to give them possibilities for employment, targeted education, training and temporary jobs.

The main challenge to economic policy was to bring price and cost inflation down to the same level as that of Norway’s trading partners.

Incomes policy has been a key element of economic policy in the 1990s. Efforts to combine strong employment growth with moderate price and cost inflation were successful for a long period during the cyclical upturn. However, due to strong employment growth and a sharp fall in unemployment since 1993, incomes policy is now facing considerable challenges. Against this background, the previous Government along with the social partners took an initiative to enhance co-operation in the area of incomes policy. As part of this strategy, a committee, with participation from the authorities and the social partners, was appointed to prepare the income settlements in 1999 and 2000 (the Arntsen Committee). The committee agreed that wage growth in 1999 should not exceed 4^2 per cent, and that wage growth in 2000 should be no higher than the level among our trading partners.

The results of the wage settlement in 1999 were to a large extent in line with the recommendations presented by the Arntsen Committee. Wage growth in 2000 is, however, estimated to be above the target set by the Arntsen Committee.

Norway, along with other industrialised countries, will be facing demographic changes that entail a growing proportion of elderly people. Along with higher average pension benefits, this will contribute to an increasing dependency burden for the economically active over the next decades. To address these challenges and maintain a high level of production of government services, it is necessary to set aside a large share of oil revenues and encourage high labour force participation.

The Government’s economic policy builds on the solidarity alternative and is based on the following key elements:

  • Fiscal policy has the primary responsibility for ensuring that changes in the total demand for goods and services are compatible with balanced developments in the Norwegian economy. The Fiscal Budget must be oriented with a view to preventing strong pressures in the labour market. The budget for 2000 entails a broadly neutral fiscal policy stance. Real underlying spending growth in the Fiscal Budget will be around 2 per cent from 1999 to 2000 Gross debt, as defined by the Maastricht criterion, is estimated to increase to about 21.6 per cent of GDP at the end of 2000. General government gross financial assets, however, are considerably higher than government debt so that net financial assets, including financial assets in the Petroleum Fund and direct investment in state enterprises, are estimated at about 48 per cent of GDP at the end of 2000.
  • Monetary policy is aimed at stabilising the krone exchange rate against European currencies. In the event of significant changes in the exchange rate, monetary policy instruments shall be oriented with a view to returning the exchange rate over time to its initial range. At the same time, there are limitations on Norges Bank’s (The Norwegian Central Bank’s) use of monetary policy instruments to maintain a stable exchange rate. This must be seen in the light of the experience of the fixed exchange rate regimes in Norway and other countries in the early 1990s. Perceptions that the use of monetary policy instruments in the form of interventions and the level of interest rates cannot be sustained will undermine monetary policy credibility and may trigger speculative capital movements. An inflation rate in line with the inflation rate of our trading partners is a fundamental precondition for maintaining a stable exchange rate. A main challenge to economic policy at present is to bring price and cost inflation down to the level of Norway’s trading partners. Norges Bank must continuously evaluate its use of monetary policy instruments in the light of conditions in the exchange market and the situation in the Norwegian economy. After having reduced its key deposit rate five times last year, by altogether 250 basis points, Norges Bank raised its key deposit rate by 25 basis points in April and another 50 basis points in June. Norges Bank’s deposit and lending rates are 6.25 and 8.25 per cent, respectively (July 2000). The money market rate (3 months) for NOK is now at about 6^2 per cent, i.e. 2^1 per cent above the corresponding rates in the Euro area.
  • The social partners have the responsibility for wage negotiations. Co-operation between the Government and the social partners shall contribute to moderate price and cost inflation. The co-operation with the social partners is further described in chapter 4.
  • Given the current situation in the labour market, employment policy will be oriented with a view to ensuring the supply of suitably skilled labour. There is a shortage of labour in many sectors of the economy, including the health sector. An increase in unemployment in petroleum-related activities as a result of the projected considerable decline in petroleum investment will be alleviated through an active use of labour market measures, intensified placement efforts and training measures. Employment policy is discussed further in chapters 3 and 6.
  • Structural policy shall contribute to a more effective management of labour, capital and natural resources. This is further described in chapters 4 and 5.

3.0 The Labour Market

3.1 Labour market developments

In the second half of 1999 there was a moderate increase in unemployment. The rise in unemployment was mainly the result of a decline in investment in the oil exploration industry. This investment is expected to level off at a lower level than over the last years of the 1990s. As a result of lower investment, activity in oil-related industries has been reduced and a number of workers in these industries have been made redundant.

However, for most occupational groups and in most sectors the labour market continues to be tight, and it is expected to remain so in coming years. Due to the high demand for labour, many employers experience difficulties in recruiting qualified employees. Labour shortages are most marked in the health sector and in building and construction. In technical professions and in manufacturing, labour shortages have decreased over the past year.

Figure 1

The variation in developments for women and men can largely be ascribed to a fairly gender-segregated labour market. The increase in male unemployment is due to lower employment in the predominantly male-dominated petroleum industry. Continuous growth in the service sector has favoured the labour market situation for women. Measured as a percentage of the labour force, the unemployment rate for men and women was respectively 3.4 and 3.0 per cent in 1999.

Approximately two thirds of the growth in employment in the period 1993-1999 was in the private sector. A survey conducted by the Directorate of Labour in May 1999 shows that 25 per cent of the companies expect to increase their workforce in the year ahead. This figure is lower than in the comparable study for 1998 when 36 per cent of the companies expected increased employment.

Traditionally, part-time employees in Norway have accounted for a relatively large share of the labour force. Since 1996, there has been a tendency of a shift from part-time employment to full-time employment. A survey conducted by Statistics Norway shows that 112 000 persons who worked part-time in the first quarter of 1998 worked full-time one year later. In the same period, 81 000 persons reduced their working hours from full-time to part-time. Among the registered job-seekers, the number of part-time employed who wanted full-time employment declined by 12 per cent from 1998 to 1999. The reduction of registered part-time unemployed has in this period been appreciably stronger than for the fully unemployed.

Table 1: Main figures for the labour market (1 000 persons).




Survey 1>:

Labour force

2 287

2 323

2 333

  • in pct of population (16-74 yrs)




  • in pct of population (16-64 yrs)





2 195

2 248

2 258





  • in pct of labour force (16-74 yrs)








  • in pct of labour force (16-74 yrs)




Register data:

Unemployed 1)>




  • in pct of labour force (16-74 yrs)




Partly employed job-seekers




  • in pct of labour force (16-74 yrs)




Participants in ordinary programmes >




Registered disabled at PES

offices >




  • pct in programmes




  1. Break in time series in January 1999.

Sources: Statistics Norway and the Directorate of Labour

The labour supply in Norway in the 1990s has been flexible. Since 1993, the supply of labour has had an annual increase of about 1.5 per cent. This is more than twice the growth implied by purely demographic trends. The projected annual increase in the labour force over the next decade is limited to 0.4 per cent. In this situation, it is important to maintain high labour force participation and create conditions that allow the labour supply to be used as efficiently as possible. In the short term, this is important in order to counter pressures in the labour market and ensure that wage and price inflation is on a par with that of Norway’s trading partners. In the longer run, it is important to encourage high labour force participation in order to address the problems associated with an ageing population and increase the production potential of the economy.

The demand for labour in the health and social sector will increase considerably in the period ahead, partly as a result of an ageing of the population. This may lay claim to a substantial share of the projected increase in the labour force. In this situation the growth in the number of new disability pensioners and those making use of the contractual early retirement scheme may contribute to labour shortages.

In 1999, 55 000 persons were registered as occupationally disabled at the public employment offices. This is an increase of 2.9 per cent from the previous year, mainly due to an increase in the number of socially disabled.

The favourable labour market situation has resulted in a considerable reduction in unemployment for immigrants. However, the unemployment rate for immigrants is still nearly 3 times higher than the total unemployment rate. Altogether 8 600 immigrants were registered as unemployed in November 1999. Unemployment among immigrants has moved in tandem with Norwegian unemployment the last year.

Table 2: Registered unemployed according to country of origin and gender

November 1999




Total unemployed




of which:

First-generation immigrants total




  • Nordic countries




  • Western Europe, rest




  • Eastern Europe




  • North America and Oceania




  • Asia including Turkey




  • Africa




  • South and Latin America




Source: Statistics Norway

Compared with many other countries, the labour market situation in Norway is very favourable. The labour force participation rate in Norway is among the highest in the OECD area, and especially the labour force participation rate among women and elderly workers is relatively high in Norway. The unemployment rate in Norway is one of the lowest in the OECD area. The long-term unemployment rate is also low in Norway measured by international yardsticks. In 1998, 9.3 per cent of the unemployed had been seeking jobs for more than 12 months. According to OECD statistics, the comparable rate in EU member countries was approximately 50 per cent. The table below provides an overview of key labour market indicators, which are used among others by the EU to measure developments in the labour market in member countries. Compared with the average for EU member countries, the labour market situation in Norway is more favourable for all the indicators presented.

Table 3: Some key figures - EU, OECD and Norway





both sexes



both sexes

A. Employment/population rate






















B. Labour force participation rate

- 15-64 years 1>






















- 55-64 years






















- 15-24 years






















C. Unemployment rate






















- share long-term unemployed

(> 12 mnd.)






















1) The OECD defines the labour force participation rate as (employed persons + unemployed persons) / population in the age group 15 to 64 years. Source: OECD

3.2Labour market policies

Labour market policy is aimed at an efficient labour market. An efficient labour market is characterised by vacant jobs being filled quickly and without creating wage and price pressures. At the same time, an efficient labour market shall contribute to a high employment rate, and create opportunities for those groups of people who have problems entering the labour market, or who are in danger of being excluded.

Norwegian labour market policy is based on three principal elements, which are given different emphasis depending on the labour market situation:

  • A structural element designed to improve the functioning of the labour market, contributing to high participation rates and low unemployment
  • A stand-by-function - or an element of stabilisation policy - by which the size of labour marked programmes is adjusted to changes in the labour market situation
  • A welfare function designed to secure income for the unemployed and persons under vocational rehabilitation, and sheltered work for the weakest groups

Labour market polices are implemented by the Public Employment Service in Norway. Its main objectives are:

  • Assist job-seekers in finding jobs
  • Assist employers in recruiting new staff
  • Prevent and moderate negative effects of unemployment

In order to address the challenges, the employment service will collaborate closely with other central government agencies, local government, counties and the social partners. Co-operation will include co-ordinating efforts for unemployed persons, both ordinary unemployed persons and vocationally disabled persons, and the planning and implementation of labour market measures. In the following section the main elements of labour market policies are described further. The priority groups are youth, long-term unemployed immigrants and the vocationally disabled. The policy towards youth is described in the chapter on raising the quality of human capital.

Given the current situation in the labour market, the policy must be oriented towards securing the supply of suitably skilled labour. An increase in unemployment in some geographical areas and industries, for example in the shipbuilding industry and other oil-related activities, can be countered by the demand for many of these workers in other parts of the labour market. An active use of labour market measures and intensified job placement efforts to find new jobs for those seeking employment will also remedy the situation. The labour market authorities will, in close co-operation with the oil-related industry, use training measures as part of the necessary adjustments.

3.3 Equal opportunities for men and women

The Gender Equality Act entered into force in 1979 and covers all aspects of life. As regards employment, the Act prohibits differential treatment of men and women concerning recruitment, promotion, notice to leave or temporary lay-offs. Differential treatment may be allowed with a view to promoting gender equality. Women and men shall have equal pay for work of equal value when employed by the same employer. The Act is currently in the process of revision. The revision aims to reinforce the Act as a tool for promoting equality, by extending the existing provision on minimum gender balance (40-60) in publicly appointed executive bodies to the semi-public and private sectors; introducing objective liability compensation for employment-related violations of the Act; making the equal pay provisions more effective, and by bringing the Act in accordance with Council Directive 97/80 on the burden of proof in cases of discrimination based on gender.

The Gender Equality Act obliges public authorities to promote gender equality in all fields of operation. Traditional equal opportunities policy and specific measures of positive action were complemented in the mid-1980s by a more comprehensive approach, later known as gender mainstreaming. Specific action programmes in the central administration in the period 1986-1994 promoted mainstreaming. The aim was to widen the scope and impact of traditional equal opportunities policy. The final evaluation of the programmes concluded that the best results were attained in policy areas that were already familiar with equal opportunities policy, such as education and labour market policy. Gender mainstreaming was underpinned by economic analysis that stressed that women represent an under-utilised potential for labour supply. The welfare state and the service sector depend on a high rate of employment among women. Women are outperforming men as regards education, but are grossly under-represented in management positions, in particular at the higher levels. Traditional educational choices among both women and men are paralleled by a strong segregation by gender in the labour market, horizontally and vertically. Gender-segregation functions as a barrier to flexibility and mobility across sectors and occupations, and limits the full use of individual talent and resources.

In response to these concerns, the reconciliation of work and family life has been a political priority since the mid-1990s and are part of the reason for the high employment rate of Norwegian women, including mothers of small children. Parental leave has been gradually expanded up to the present level of one year with 80 per cent pay, including a 4-week quota for the father, and with possibilities for another two years unpaid leave. Childcare arrangements have been developed, but still fall short of the need. An important precondition has been the relatively high representation of women in democratically elected bodies and in Government since the mid-1980s. This presence has not been matched in the private sector. Active training, including mentoring programmes have been implemented to increase the number of women in management. The establishment of micro-credit schemes and network activities has encouraged female entrepreneurship. Women are less involved than men in the use and development of new technologies. Active measures, including quotas in further education, have proven successful to increase the number of women in this field.

Long-term unemployed

For the long-term unemployed, the Public Employment Service (PES) will provide special follow-up, such as regular contact, guidance and information on employment and educational programmes and, where relevant, individual plans of action. People who are long-term unemployed are given priority for slots in programmes, if direct job placement is not successful. In order to maximise the effect of programmes for the long-term unemployed, the labour market programmes must be based on the need for skills and qualifications, and the experiences of the unemployed, both educational and with regard to work. Training programmes are important instruments for returning the long-term unemployed to working life.

The PES will provide special assistance in the area of job placement and training places for those whose unemployment benefit entitlement has expired. If slots in programmes are not available, they may receive financial support comparable to their earlier unemployment benefit.

3.5Vocationally disabled

Disabled persons are an important resource for the labour market. It is thus important that efforts are made to clarify what type of assistance they need to enable them to gain access to the job market.

Figure 2: Number of persons with disability pension

All disabled persons embarking on a rehabilitation programme shall have an individual action-plan developed in co-operation with the PES. The whole range of services developed by the PES, from information, guidance and placement assistance to schemes specifically designed for disabled job-seekers, will be used to help the vocationally disabled return to the labour market.

The number of places in programmes has increased during the 1990s. A continued objective is that a minimum three-fourths of registered disabled persons shall participate in active programmes in 2000. It is also an aim for 2000 that at least half of those registered as disabled shall have completed a rehabilitation process and shall either be ready to take up a job, have a job, or have started education. In order to assess the situation for vocationally disabled persons and their need for training, places in ordinary education and working life are being given priority. About half of the places are in ordinary education.

Comprehensive and targeted efforts are essential in order to succeed with a rehabilitation process. The favourable job market must be exploited to the advantage of the vocationally disabled. However, an active solution is not the outcome for everybody. Some disabled persons are referred back to the health and social services for further treatment or to the National Insurance Scheme to obtain a disability pension. As a general rule, rehabilitation shall be considered before a disability pension is granted.

In order to increase the focus on efforts aimed at disabled persons, the Government has developed an action plan for disabled persons in working life for the period 1998-2001. The Government proposes to maintain extensive efforts to encourage the disabled to enter working life. An overall guideline will be to organise working life in a way that prevents handicaps from becoming an occupational disability. The second main direction will be to assist the disabled in entering working life. The efforts of the labour market authorities will mainly be concentrated on the latter.

The PES, the social partners and NGOs (non-governmental organisations) are meeting regularly to discuss programmes and other measures for the vocationally disabled. Another important partner in the efforts aimed at the disabled is the National Insurance Administration, with which the PES has a formalised co-operation. A similar co-operation will be sought with the health authorities, so that those with psychiatric disabilities can receive medical follow-up while they participate in labour market programmes. A commission has been set up by the government to view measures to reduce the growth in number of persons on sickness and disabled benefits. The commission will deliver its report in the autumn 2000.

3.6 Immigrants’ participation in working life

In general, immigrants have more problems finding a job than persons born in Norway. Renewed efforts to improve their labour market situation are therefore called for. The PES will primarily focus on placement assistance and encourage them to participate in job-seeking activities. However, individual plans of action will be used as well, particularly for immigrants who are long-term unemployed. In 1999, about one third of the measures for the unemployed were filled by immigrants.

The PES has developed courses and training that are specially designed for immigrants. In co-operation with the educational authorities in the municipalities, the PES will assist in qualifying immigrants for the job market as early as possible after their residence permit is in order. Co-operation between the PES and the social partners will be continued in order to find more jobs and training places for immigrants. Furthermore, as a follow-up to an action plan for recruiting persons with an immigrant background for jobs in the public sector, the PES will seek co-operation and establish agreements on placement with public employers.

Immigrant women are more affected by unemployment compared with both immigrant men and women and men of the majority population. Many immigrant women have problems to find a job that corresponds to their qualifications. Among some groups of first-generation immigrants, illiteracy is widespread and these women face particular problems. Literacy programmes are undertaken alongside Norwegian language courses and general labour market training. One innovative project in this field, the "Quo Vadis?" was granted co-funding under the EU Equal Opportunities Programme.

3.7The need for labour - placement activities

In order to achieve sustainable high employment and low unemployment, it is important that employment policy contributes to reducing imbalances in the labour market, particularly by alleviating the shortage of labour in some labour market segments. Placement assistance to job seekers and recruitment assistance to employers will be used to ensure a good flow of labour from sectors and industries that are being scaled back to activities that are expanding. Active labour market measures are primarily focused on youth and the long-term unemployed.

The ratio of the number of unemployed to the number of vacant positions gives an indication of the tightness in the labour market. The fewer unemployed per vacant position, the tighter the labour market. However, the labour market consists of several segments, both with regard to geography and occupations, which can change in different ways. Over the last decades we have seen a steady decline in the primary and secondary sector. The tertiary sector accounted for more than 70 per cent of total employment in 1999. (See figure 3).

Compared with 1998, a survey from the Directorate of Labour shows that companies reported fewer problems in recruiting personnel in 1999. However, there are large variations between occupations. In general, the labour market has become tighter in the service sector whereas in manufacturing it has become less tight. Recruitment problems are still pronounced in the health sector and in building and construction. 25 per cent of the companies expected to increase their workforce in the year to come. This number is lower than in the comparable study for 1998 when 36 per cent of the companies expected increased employment. Growth expectations are highest in business services, building and construction, and manufacturing of machinery and electronics. Expectations of reduced employment were most clearly in evidence in the communications sector and in the energy and water supply sector.

Figure 3: Share of total employment in the primary, secondary and service sector (1980-1999)

Source: Statistics Norway

The last couple of years the PES has actively tried to use the demand for temporary labour as an opportunity for the unemployed to enter the labour market. A report presented by the Norwegian research institute, the Institute for Social Research (ISF), shows that companies adjust their demand for labour according to variations in market demand for the company’s products or services. This is also called numerical flexibility. Numerical flexibility can be achieved in different ways, such as through temporary employment, use of sub-contractors, hiring of labour or overtime work. According to the report, use of sub-contractors, use of overtime and use of temporary employees are the most widely used types of numerical flexibility. According to Statistics Norway, 25 per cent of all persons fully employed worked overtime in the second quarter of 1999. There were more men (28 per cent) than women (19 per cent) who worked overtime. The use of overtime accounted for 78 000 man-years, 9 000 less than the year before. 10.7 per cent of all employed were temporary employees in the second quarter of 1999. This is 1 000 fewer than at the same time the previous year.

Placement activities of the PES have expanded considerably since 1997, also to cover a larger part of the labour market. This partly explains the increase in number of placements where the PES was involved, from 111 900 in 1997 to 216 000 in 1999. However, a person can be placed several times during a year, so the number of placements cannot be interpreted as the number of persons placed during a year. The number of persons placed by the PES decreased by 6 per cent (from 95 000 persons to 90 000 persons) from 1998 to 1999, compared with the + 50 per cent increase in the number of placements.

The main reason for the strong rise in PES placement activities is that the PES has put emphasis on placements in the short-term market, especially by providing substitutes to employers, for example when employees are on sick leave. The PES has made arrangements with schools, health institutions and larger private enterprises, which means that the PES shall provide them with adequately qualified substitutes. In 1999, 27 per cent of PES placements covered employers’ need for short-term substitutes.

The provision of short-term substitutes by the PES can reduce the administrative burden of enterprises. This again can increase production or improve the quality of the services provided by the enterprises. In short, better that nurses care for patients than manage substitute lists. Furthermore, the PES can probably do the job more efficiently since it has access to more job-seekers and is more experienced in carrying out placements than the enterprises. The feedback from employers is that these services meet their needs and are appreciated.

3.8 Labour market programmes

Information, guidance and placement assistance will be given high priority in the PES for all job-seekers. For those who are difficult to place directly in a job, a main strategy will be to organise labour market programmes first and foremost to raise the competencies and skills of the unemployed so that they can quickly fill vacant jobs. In other words, a main task of the PES will be to prevent bottleneck problems. In principle, labour market schemes will only be used if ordinary placement efforts fail.

Consistent with the expected rise in unemployment due to problems in certain industries, it was decided to raise the average level of slots in labour market programmes from 7 000 in 1999 to 11 000 in 2000. Out of these, 3 000 programme slots was reserved for people laid off or at risk of losing their jobs due to the restructuring of oil-related activities. Following improvements in oil-related industries during the first half of 2000, some of these measures will be offered other vulnurable groups in the second half of 2000. Young people under 20 years of age and long-term unemployed will be given priority for participation in programmes. Brief job-related training courses and job training slots will be the most relevant type of measure.

Women and men have the same access to the services of the PES. At the beginning of 2000, women accounted for about 40 per cent of unemployed persons in Norway, while their share of places in ordinary labour market programmes was 48 per cent. Women are over-represented particularly in training programmes, and many women use skills enhancement as a strategy to improve their job opportunities.

In 1999, 55 000 disabled persons were registered for vocational rehabilitation at the employment offices. Disabled persons are an important resource for the labour market. It is thus important that efforts are made to clarify what type of assistance they need to enable them to access the job market. The whole range of services developed by the PES, from information, guidance, and placement assistance to schemes specifically designed for disabled job-seekers, will be used.

3.9Unemployment benefits

Unemployment benefits shall compensate for loss of income, which is caused by unemployment. At the same time, the system shall motivate people to find work or participate in programmes. The unemployment benefit system shall underpin the active labour market policy by securing an income for a limited period of time. The system shall ensure availability and willingness to work.

The unemployment benefit system in Norway is part of the main general insurance system, the National Insurance Scheme, which is financed through contributions from employees, employers, self-employed persons and the government.

Unemployment benefit may on certain conditions be given to:

  • unemployed job-seekers
  • laid-off persons
  • partially laid-off persons
  • partially employed persons if working time has been reduced by 40 per cent compared with the working time before unemployment occurred, and the person wants full employment
  • job-seekers who want to retain the benefit instead of programme grants during course participation or in trainee places

In order to be entitled to benefits, the job-seeker must have been registered at the PES for at least three out of the last ten working days. Job-seekers must be able and willing to take available jobs or participate in programmes. Geographical and occupational mobility is a basic condition for being entitled to benefits. Benefits may temporarily be suspended if the unemployment is considered to be self-inflicted, or if the person concerned refuses to take a suitable job, refuses to participate in labour market measures or failed to appear at the employment office when summoned. In the favourable labour market situation we have in Norway, benefit regulations will be strictly enforced.

The daily cash benefits under the unemployment system are based on earlier income from work, and are provided to people who have participated in working life. One of the main entitlement criteria is that the unemployed has had income from ordinary work amounting to a minimum of NOK 61 362 the last year, or NOK 49 090 on average over the last three years. This corresponds to respectively about 23 and 19 per cent of the average salary of an industrial (blue-collar) worker. The maximum duration of the benefit period depends on previous income. Income from work amounting to NOK 98 180 gives a benefit period of three years. Less than this amount gives a benefit period of 1.5 years.

Benefit recipients over 64 years may receive daily cash benefits until they retire at 67. Self-employed persons above the age of 64 are also entitled to unemployment benefits.

One of the aims of the PES is to clarify entitlement to benefits as early as possible, and a minimum 80 per cent of the applications for unemployment benefits must be processed within 21 days.

4.0 Structural Policy

4.1Industrial and structural policy

Structural policy shall contribute to achieving an optimal use of national resources, including labour. The efficient use of resources is important for maintaining high value added and achieving the growth potential of the economy. This provides the basis for developing the welfare system in Norway. At the same time, the pace and scale of structural policy measures must also be subject to distributional considerations.

The authorities intervene in product markets in various ways:

  • Effective business legislation is necessary to provide a stable framework for economic activity. Furthermore, it is important that laws and regulations are not so extensive and detailed that they impose unnecessarily high costs on enterprises.
  • Support to industries can be used to promote research and development or other objectives in cases where there are no motives for the company to act fully in the best interest of society. Support to industries can also play an important role in fostering economic activity in the regions. However, it is important that various forms of support be evaluated in relation to the relevant objectives.
  • Competition policy shall promote the efficient use of resources by fostering effective competition. It is often a demanding task for the competition authorities to determine whether the provisions of the Competition Act should apply in individual cases, for example when considering mergers that have positive effects in the form of cost reductions but negative effects in the form of reduced competition.
  • In some cases it may be necessary to introduce separate regulations for the market to function effectively. Separate regulations are, for example, necessary in the fisheries sector where various quota systems have been introduced to ensure the effective and sustainable management of fisheries resources. In other sectors, the authorities play a supervisory role with regard to the conditions for the use of infrastructure used by the entire industry. This is the case, for example, in the telecommunications sector and the electricity industry. Public sector ownership is also considerable in some sectors.

The guidelines for industrial policy were presented in Report no. 41 to the Storting (1997-98) "Industrial policy into the 21 st> century". The objective of industrial policy is to generate higher value added in order to achieve the overriding objectives of welfare and employment.

The estimated budgetary support to industries was NOK 18.5 billion in 1998, or 1.7 per cent of GDP. The calculations show that agricultural support accounted for about 67 per cent of total budgetary support to industries in 1998. There was a downward trend in support to industries during the 1990s.

Competition policy promotes the efficient use of resources by creating conditions for effective competition, among other things through rules and supervision. Competition legislation and the competition authorities’ follow-up of this are therefore key elements of structural policy.

Experience in connection with the Competition Act and the competition rules under the EEA Agreement have shown that there is a need to review Norwegian competition policy and Norwegian competition legislation. So far a proposal to introduce a number of immediate changes has been presented in Proposition no. 97 to the Odelsting (1998-99). Among other things, it is proposed that the Competition Authority be given authorisation to prohibit corporate acquisitions and take temporary measures that are considered necessary pending the Competition Authority’s final decision concerning an acquisition.

4.2 Co-operation with the social partners

The determination of wages and other employment conditions is the responsibility of the labour market organisations, although tripartite arrangements concerning e.g. incomes policy have long traditions. Norwegian experience with these tripartite arrangements is generally good. The primary ambition of tripartite co-operation in Norway is usually to reach a common understanding of the actual facts of the general economic situation, developments in wages and prices and so on. It is believed that this will facilitate later wage negotiations and create a responsible attitude among the parties. If possible, one seeks to reach an agreement on economic policy measures.

Formal institutions of tripartite co-operation in Norway date back to the 1960s. These talks typically take place prior to negotiations on wages or negotiations among the organisations of employers and employees and with the organisations representing fishermen and farmers.

The Contact Committee (Kontaktutvalget)

The so-called Contact Committee is the most important body of incomes policy co-operation. The Prime Minister chairs the committee. In these meetings the Government presents its views on the current economic situation. The organisations also present their views and bring up issues they consider important to discuss. The committee usually has two meetings a year i.e. one in the autumn when the Government presents the Fiscal and the National Budgets to the Norwegian parliament (Storting) and one in February prior to the wage negotiations. The previous Government enlarged the committee. Following this enlargement, all the main organisations of employers and employees as well as the organisations representing farmers and fishermen are represented.

A special contact group (Kontaktordningen)

A special contact group, chaired by the Minister of Labour and Government Administration, has been set up between minor organisations of employers and employees not represented in the Contact Committee and the Government. It functions more or less in the same way as the Contact Committee.

The Technical Reporting Committee on the Income Settlement (Det tekniske beregningsutvalg)

The Technical Reporting Committee on the Income Settlement serves the purpose of providing unbiased information on economic developments to all parties. It also seeks to reduce disagreements stemming from different perceptions of the current or future economic situation. An independent expert chairs the committee. Presently this position is held by the director of Statistics Norway (SSB). The Technical Reporting Committee on the Income Settlement includes members from the main organisations in the labour market as well as members from two ministries. It submits two reports to the Ministry of Labour and Government Administration each year.

Co-operation with the social partners on specific issues relating to the labour market takes place in connection with the establishment of public commissions. In 1998, wages increased far more in Norway than in our main trading partner countries (6.2 per cent vs. 2.9 per cent). The main interest organisations were invited to an incomes policy conference to discuss questions concerning the income settlements in 1999. In the wake of this conference four public commissions were appointed:

Commission for the preparation of the 1999 wage settlement– "Arntsen Commission" (Arntsen-utvalget)

The organisations attending the conference agreed to set up a fast-track commission to prepare the 1999 income settlements. The commission was chaired by an independent leader, while the other members came from the main employer and employee federations, the organisations representing fishermen and farmers and three different ministries. Its mandate was to establish a basis for the income settlements in 1999. A common understanding was reached in the commission that wage growth in Norway should be reduced to the same level as in our major trading partner countries. The members of the commission agreed that this aim should be reached in two years, viz. year 2000. In retrospect wage growth in 1999 was well in line with the plan. An important part of the commission's work was to prepare a competence reform, which should comprise the entire working force. The commission agreed on certain general approaches.

Tripartite Commission for discussion of labour law changes (Arbeidslivsutvalget)

A Tripartite Commission with a mandate to prepare the discussion of the need for changes in labour laws finalised its report in December last year. The commission analysed the situation with regard to working conditions, working hours, terms of hiring and firing and the regulations of these conditions. It focused on the need for flexibility in enterprises and in the labour market. Its recommendations include a simplification of labour laws (e.g. the regulations on hiring temporary workers) claiming that today’s regulations are difficult to understand for non-lawyers. It also recommends other topics for further discussion, e.g. it recognises that employees are given more responsibility and influence for their working conditions, working time etc, and the commission raises the question of whether regulations to some extent should reflect these changes. An independent senior economist chaired the commission. The main organisations of employers and employees as well as the Government were represented.

Commission for Employment and Economic Growth (Sysselsettingsutvalget)

Its task was to review developments in the Norwegian economy with particular emphasis on the labour market situation, to identify the most important future challenges, and to discuss strategies for balanced development in the Norwegian economy. According to its mandate, the commission should examine future challenges related to the wage negotiation processes outlined by the "Arntsen Commission". The commission should present an outline of the main challenges for Norwegian economic policy and to discuss strategies that will contribute to balanced developments in the Norwegian economy, an efficient public sector and a just distribution of goods in society. Furthermore, the commission should analyse developments in the Norwegian economy in the 1990s, with an emphasis on incomes policy, regional mobility, the labour market and changes in the composition of industries. This commission also had an independent chairman, a respected economist. All the main organisations in the labour market as well as representatives from various parts of the public sector took part in the commission. The commission submitted its report to the Minister of Finance on the 30 th> of June.

Commission for collective bargaining systems (Stabel-utvalget)

According to its mandate, the commission will provide a broad analysis of how today's wage negotiation arrangements and framework function and discuss the possible need for changes. The commission will also take a closer look at the proposals made by the "Arbeidsrettsrådet". The commission will consider its work in connection with the work of the Commission for Employment and Economic Growth. This commission also has an independent chairman. All the main organisations of employers and employees are represented. The commission is expected to submit its report at the end of 2000.

4.3 Labour law

Based on a bill presented to the Norwegian Parliament (the Storting) in May 1999, it was decided in December 1999 to make changes in the legislation on hiring out and in of labour and private placement services. The aim of these changes is to contribute to a more flexible labour market. Following a decision from the Storting 16 June 2000, the Government has been asked to implement the legislative changes with the effect from 1 July. At the same time, the Ministry of Labour and Government Administration was given permission to let the Public Employment Service establish payment services, including hiring out of labour, for a limited time. The Storting asked the Government to put forward a proposal for permanent organisational arrangement of these services in connection with the budgetary proceedings for 2001. More on the new payment services of the PES is to be found in chapter 6.

The main elements of the new legislation are:

  • Abolishing the public monopoly on placement, i.e. giving private placement agencies a general right to carry out placement services.
  • Extending the scope for the operation of temporary work agencies to include all sectors. Hiring of labour will be limited to those situations where current legislation allows for temporary employment contracts.
  • Making it possible for the Public Employment Service (PES) to charge employers for some extended services.
  • Widening of the advisory tripartite board for the Directorate of Labour by including the major employee and employer organisations.

4.4 Social insurance schemes and pensions

In 1998, two official reports dealing with pension policy issues were submitted, NOU 1998:10 "Funding the National Insurance Scheme" and NOU 1998:19 "Flexible retirement". The background for the two reports is demographic changes, with an increasing share of elderly in the population combined with higher average pension benefits. This will cause an increasing dependency burden over the next decades. A growing use of early retirement schemes may contribute to increasing the dependency burden. The formal pension age in the National Insurance Scheme is 67. The actual average retirement age, however, is considerably lower. Along with an increase in persons on disability pensions, this reflects a greater use of other early retirement schemes.

Total disbursements by the National Insurance Scheme for old-age and disability pensions are estimated to increase from 8 per cent of GDP in 1995 to 15 per cent of GDP in 2030. At the same time, public finances will be strained by a gradual decline in petroleum revenues. In order to address these challenges and to maintain a high level of public services, a large share of current petroleum revenues must be set aside.

Labour force participation rates among older age groups have fallen substantially over the last few decades. The labour force participation rate for the age group 64-66 declined from about 50 per cent in 1980 to just above 30 per cent in 1999. Figure 4 shows the number of persons under the contractual early retirement scheme in the 1990s.

Fig 4: Number of persons under the contractual early retirement scheme 1989-1999

The work following NOU 1998:10 and NOU 1998:19 is therefore focused on measures aimed at reducing the extent of early retirement. At the same time, individual needs have to be taken into consideration. Some older workers are weary after a long career and may feel the need to retire before the age of 67. It is the Government’s view that the pension schemes should be developed in order to provide for increased flexibility.

One way to reduce early retirement is to look at the factors that encourage a longer working career. The previous Government allocated NOK 1 million to the Centre for Senior Planning (Senter for seniorplanlegging) for a project to be carried out in co-operation with the social partners. The objective of the project is to provide an overview of national and international research and experience in the field of elderly workers and retirement. Furthermore, on the basis of the theoretical and empirical material collected, the project has the mandate to make proposals to the Government for possible future action. The aim is to encourage more elderly people to remain in work and postpone any decision on early retirement.

5.0 Raising the Quality of Human Capital

5.1Efforts aimed at young people

The 1994 educational reform (Reform 94) gave young people aged 16 - 19 a statutory right to three years of upper secondary education. The key principles and objectives for national policy concerning education and vocational training at the upper secondary level are:

Education is a public responsibility, which is free of charge. The costs are covered by public budgets.

Every young person completing compulsory education is entitled to three years of upper secondary education, leading either to a university entrance qualification, to a craft or journeyman’s certificate or to some other form of vocational competence.

The education and training provided shall be of high quality, broadly based and provide for a range of options independent of geographical location and social conditions.

Young people’s statutory rights include 3 years of full-time upper secondary education (or the equivalent of 3 years of full-time education for apprenticeships). The right has to be used within a four-year period, which means that young people’s transition from education to working life may be postponed a year.

All pupils have the right to be admitted to one of their three preferred basic courses of choice. The county governments in Norway have an obligation to provide upper secondary education to all pupils between 16 and 19 years. They must also provide an additional number of places for other groups, including adults.

A county vocational training committee is responsible for finding places for apprentices and is required to have close contact with enterprises. The committee also plays a role in matching enterprises and apprentices. It is, however, up to the enterprise to decide whether it wants an apprentice and which of the available persons it wants.

Each county government has a statutory obligation to establish a follow-up service for those who are neither in education nor in employment. The follow-up service ensures that young people who do not take advantage of their right to upper secondary education receive a job offer or a place in a labour market programme. The follow-up service is based on co-operation between government bodies and educational institutions, including the PES and the social and health services.

A majority of the unemployed under 20 years of age are offered places in upper secondary education. Those who do not start an upper secondary education and who cannot find a job are offered places in labour market programmes. These are to a large extent combined programmes, where the participants receive both education and practical training. The education authorities in the counties are responsible for providing the education, while the PES is responsible for providing training places.

There is extensive co-operation between the labour market authorities and the education authorities in the area of policy development as well as planning and implementation.

So far, experience has shown that the follow-up service is successful. The counties have been able to follow the youth cohorts, and young people who are not attending upper secondary school for some reason or another are given assistance. Figures from 1 June 1999 (SSB, Aktuell utdanningsstatistikk, 04.10.99) show that 95 per cent of young people aged 16 – 19 were either in full-time education or in employment, the vast majority in full-time education. 7.6 per cent of 16 – 19 year-olds were contacted by the follow-up service. 0.8 per cent rejected assistance from the follow-up service, and about 0.4 per cent have not been possible to trace.

The main model for vocational education consists of 2 years of schooling followed by 2 years of apprenticeship, where work and training are combined. The pay of the apprentices is based on the wage agreement for the various trades, and amounts to about half of what a skilled worker receives. The wage level increases during the apprenticeship period. Pupils and apprentices in vocational areas of study who wish to obtain a university entrance qualification in addition to their trade certificate or journeyman’s certificate may take a one-year course of specially-designed supplementary courses in general subjects after the completion of the vocational education. Persons who are not able to find an apprenticeship are offered full-time education within the school system.

Before Reform 94 was introduced, many pupils did not satisfy the requirements to obtain a certificate. They left upper secondary education without documentation of the actual skills acquired. Reform 94 therefore introduced a statutory right to obtain documentation in the form of a partial qualification certificate. This means that pupils may aim at completing only parts of upper secondary education to obtain documented skills. The pupils may later continue their education with the objective of obtaining full university entrance qualifications or vocational competence. It is also possible to extend the three-year period of upper secondary education to a maximum of five years for pupils who need more time to complete their courses.

Furthermore, labour market programmes have now been developed to provide formal qualifications adapted to this system. It should be noted, however, that labour market training courses are not available to those who are under 19 years of age.

The social partners have always had a significant influence on vocational training in Norway, particularly with regard to apprenticeship measures. The social partners make an important contribution to the formulation and implementation of vocational training. Their role is also reflected in the procedures for representation, for instance in their participation in the development of curricula and in their contribution to reports concerning the different fields and levels of education and training. The responsibilities and involvement of the social partners are regulated in the general agreements on wages and working conditions. Furthermore, the Ministry of Education co-operates with the social partners on decisions concerning occupations and types of training that should be part of the public training and certification system.

5.2Efforts aimed at the ageing workforce

The comprehensive development of the public education system during recent decades has given an increasing number of young people the opportunity to receive an education. This development means that the older segment of the labour force generally has a far shorter formal education than the younger segment.

There is a growing concern in many countries about the widening gap between the need for and the availability of new knowledge in the workplace. This problem is due mainly to the speed with which changes are taking place in society and in the workplace, and which is exacerbated by the fact that the population is ageing.

It has been decided to implement a competence reform for adults in Norway. The basis for the reform is the need for competence in the workplace, in society and by the individual. The reform is designed and implemented in close co-operation between the Government and the social partners.

One of the objectives of the reform is that the educational system must be designed in such a way that adults can be given the same opportunities to acquire new skills as young people of today. Readjustments and the subsequent renewal of knowledge will be the stable ingredient of life. The knowledge adults have acquired through basic education must thus be maintained and renewed. The educational system must be open, making it possible to resume an education at any time of life and from any trade or profession, without meeting major, formal obstacles.

The reform will encompass all adults in and outside the labour market, and includes several concrete proposals, which are to be implemented or are under implementation.

The measures are:

Assessment and recognition of non-formal learning: Systems are being established whereby non-formal learning can be documented for use in the educational system and working life.

Opening up the educational system: All adults who need basic education must be given the opportunity to obtain this. A proposition regarding the establishment of the rights of adults to primary and secondary education has been submitted to the Parliament in the spring of 2000.

Statutory study leave: The Parliament has adopted an amendment to the Working Environment Act that gives employees an individual right to a leave of absence in order to study. These legal rights have been prepared in co-operation with the employer and employee organisations in order to ensure equal treatment of individuals regardless of workplace factors.

Funding: The funding schemes managed by the State Educational Loan Fund are under revision to adapt them more closely to continuing education for adults The Parliament has adopted an amendment to the Taxation Act, which provides tax exemption for free education in connection with one’s work.

Competence-building programme: A special funding scheme has been introduced to contribute to innovation in and further development of the market for continuing education and training. The objectives of the programme are to make private and public enterprises more capable of identifying and fulfilling their need for competence, develop arenas for collaboration between the parties on the employer/employee side and the education side, and develop continuing education and training programmes that are to a larger degree adapted to the needs of the labour market.

Greater independence for universities and colleges: More flexibility shall be given to educational institutions in initiating continuing education courses of shorter duration.

Motivation and information: It is of vital importance to the competence reform as a whole that the motivation and information initiatives directed at adults are successful. Information about education should be compiled and made easily accessible to everyone who applies for education. This is a continuous process.

The Government has prepared a plan of action for the Competence Reform. The plan has been designed in close co-operation with the social partners and other participants. The plan of action has been divided into eight areas of focus: Flexible learning, framework conditions for individuals, the competence-building programme, documentation and evaluation of non-formal learning, "popular enlightenment" and democratic participation, a new chance – primary and secondary education, structural changes to the public education system and motivation and information.

The objectives of this plan have been formulated with a four-year timeframe in mind, while the measures outlined in the first edition relate to the year 2000.

6.0The Public Employment Service

The Public Employment Service is supervised by the Directorate of Labour and comes under the jurisdiction of the Ministry of Labour and Government Administration. In 1999, the PES consisted of 18 county employment offices, 129 local employment offices with 72 sub-offices, 18 employment counselling offices, the Centre for Occupational Rehabilitation (in Oslo), 18 working life advisory service centres, the Labour Market Administration’s Service Centre (in Mo i Rana), the PES European Employment Service (EURES), and the PES Unemployment Benefit Control Office (in Oslo).

Figure 5: The Labour Market Administration

The Public Employment Service had a staff in 1999 equivalent to 3673 man-years. Personnel resources have been reduced by altogether 550 man-years from 1994 to 1999, mainly as a result of the scaling back of labour market programmes.

An overview illustrates how the resources of the PES were employed:

Table 4: Use of resources in the PES (1998)


Use of resources (in per cent)

1. Assist job-seekers in finding jobs


Information and registration


Clarification and follow-up of job-seekers


Contact with collaborators


Qualification, integration, and employment measures


2. Assist employers in recruiting and adapting to changing environment


Contact with business sector org. Contact with collaborators


Recruitment assistance


Placement measures


3. Prevent and moderate negative impact of unemployment


Unemployment benefit, rehabilitation allowance and appeals


Fraudulent use of benefits, correction of errors


Sheltered employment


Preventive efforts e.g. the Employers’ Advisory Service


Compared with previous years, PES has tended to use an increasing share of resources for clarification and follow-up of job-seekers, contact with collaborators and assistance to employers in recruiting.

6.1Principles and methods for users of the services of the PES

The guiding principle for the services of the PES is to adapt the assistance to the needs of the users.

The availability of self-serve systems on the Internet is increasingly becoming the basis of the PES’ service to a major portion of job-seekers and employers looking for new staff. Newly registered job-seekers receive information about the type of assistance they can receive from the PES, what one expects from them as job-seekers, along with information about vacant jobs and the labour market in general. Job-seekers lacking knowledge about opportunities, and who feel insecure about the avenues open to them, may receive guidance, individually or group-based.

Job-seekers who do not find a job themselves are asked to attend follow-up meetings at the employment offices. The first meeting takes place three months after registration. The purpose of the follow-up is to make sure they are given an assessment of their assistance needs, and whether programme participation is relevant. At the meetings, job-seeking activities and job opportunities are discussed.

The service for disabled job-seekers is broader. The disabled job-seeker and the PES together elaborate an action plan, which has an ordinary job as the final objective. The plan describes what the disabled job-seeker has to do and where the PES can assist.

Moreover, individual action plans are drawn up for other groups who have problems finding employment, such as long-term unemployed immigrants.

The employment offices can be provided with specialist knowledge for extending assistance to job-seekers who experience special obstacles and limitations in connection with work and training. The employment counselling offices work with the individual job-seekers to define the premises and opportunities for work, to set realistic goals and find solutions and development opportunities, which can enable them to obtain a job. The offices are also responsible for developing methods and expertise in the field of rehabilitation.

Another support function is provided by the Employers’ Advisory Service, which provides advice and guidance to employers regarding the work environment with the aim of reducing sick leave among employees. The aim is to prevent exclusion and permanent disability. They also work jointly with the social partners to develop systems and methods for internal rehabilitation in enterprises. Small- and medium sized businesses represent an important target group for these services. An Employers’ Advisory Service has been established in every county in Norway.

Figure 6:

6.2A new quality management system and increased customer focus

The Employment Service in Norway has introduced an extensive quality management system for its service production, covering all its main products. The system is regularly being updated and improved and is now being revised in line with the new financial management regulation for the government sector in Norway which will gradually be introduced in the period to 2003.

The Employment Service co-operates closely with other public authorities, local government and the social partners in order to provide the best service to persons who are in need of assistance from several bodies in order to return to employment.

The Government views public service offices as a general way of organising the work of public offices in the local communities. The general guidelines for public service offices are being developed. The offices will be set up based on local initiatives, and the appropriate model for public service offices will be chosen on the basis of local needs. The aim is to give the users of public services coherent information and good service with easy availability. A contribution from the PES to the availability of its services is the introduction of "virtual employment offices". These will mainly be set up in connection with public service offices and in municipalities without an employment office. In the virtual employment offices, the job-seeker will be assisted through the use of the Internet and other technology-based solutions for job information. If necessary, the job-seeker can contact a counsellor in a nearby PES office through the use of a videophone. The first virtual employment office was opened on 1 September 1999.

Work has also been launched in order to improve the infrastructure of the employment offices in order to facilitate access for physically disabled persons. Specifications of how the employment offices and their technological equipment should be designed will be drawn up in order to accommodate the needs of all groups of users, and this will be gradually implemented in all employment offices.

6.3The new payment services of the PES

Following a decision from the Storting June 16, the Ministry of Labour and Government Administration was given permission to let the Public Employment Service establish payment services, including hiring out of labour, for a limited period of time.

The payment services, which now will be introduced for the employers, shall be a supplement to the core services of the PES. The focus of the PES shall continue to be on giving service to unemployed and vocationally disabled job-seekers. The PES shall not charge job-seekers for service provided. The payment services shall contribute to promote the objectives of the PES. The core services of the PES shall continue to be supplied free of charge to the employers, including private temporary work agencies and private job placement firms. All users of the PES’s payment services shall be charged the same for the services. Firms, which provide private placement services or hiring out of labour, shall pay for these services on the same terms as the other users of the PES’s services. Payment services are to be offered in the whole of Norway.

The payment services to be established within the PES are briefly described below.

  • Personnel selection – to assist in connection with the employers’ recruitment process of new staff.
  • Temporary labour services – to assist employers to cover their current need for temporary labour within an agreed size and period of time.
  • Competence building – to assist the employer in enhancing the competence and skills of the staff.
  • Restructuring assistance – extending the core services of the PES at the expense of the employer to provide assistance to employees in danger of being made redundant, so that they are given the best possible opportunity to get a new job.
  • Hiring out of labour - to cover the employers’ need for temporary labour and contribute to job-seekers with difficulties in the labour market to get a job, through hiring out personnel where the PES carry the employer responsibility.

The organisation of the payment services, including control functions, is to be established during the autumn of 2000.

6.4The European labour market and international co-operation

The Public Employment Service in Norway has been very active in providing assistance to employers who want to recruit staff members from other European countries. Assistance has been provided particularly with regard to recruiting medical doctors, dentists, nurses and engineers. Training programmes in the Norwegian language and society in the home country for persons interested in working in Norway have proved successful, and are being continued in 2000. In 1999, 118 medical doctors were recruited through the PES health recruitment project, most of them from Germany. Of the nearly 300 nurses recruited, the majority came from Finland. The efforts in recruiting health personnel are being increased for 2000 to include more countries and also to cover the recruitment of dentists.

The EURES network, the European network for co-operation on placement services, is actively supporting Norwegian employers who want to recruit from EU countries. From having EURES offices in the five biggest cities in 1998, the EURES network has now been extended to cover nine cities. EURES consultants provide information on job opportunities and living conditions in Norway and in EU countries to improve the mobility to and from Norway.

The PES has since 1993 had a cross-border co-operation with the labour market authorities of northwest Russia, especially in Murmansk County. Under this project, the Norwegian PES is providing computer equipment, guidance and training of civil servants.

At the general assembly of WAPES (World Association of Public Employment Services) which was held in Mexico in May 1999, the Directorate General of the Norwegian PES, Mr. Ted Hanisch, was elected President of WAPES for a term of four years. WAPES is a worldwide network of public employment services. It was established in 1988, and today has 80 members. The objective of WAPES is to develop public employment services through co-operation and the exchange of information and best practices.

6.5Some main targets for the Public Employment Service for 2000

  • The average number of slots in labour market programmes will be 11 000 for ordinary job-seekers
  • The share of long-term unemployed of the total number unemployed shall not increase
  • For unemployed who are vocationally disabled, the average number of slots in programmes will be 20 070
  • Three fourths of the vocationally disabled shall participate in programmes
  • At least half of the disabled programme participants shall, after having finished their rehabilitation programme, be ready for jobs or ordinary education
  • At least 80 per cent of unemployment benefit applications shall be processed within 21 days
  • Young people under the age of 20 without a job or place in school shall be offered a place in labour market programmes
  • The number of placements shall increase

More information about the Norwegian PES and job opportunities in Norway may be found on the web site of the PES: www.aetat.no.

7.0Facts about Norway

The Country

Norway is one of the five Nordic nations which lie within the northern stretches of the European continent. It is bordered to the east by Sweden, Finland and Russia; to the west by the Norwegian Sea and the Atlantic Ocean; to the north by the Barents Sea, and to the south by the North Sea. In total area, Norway measures 386,958 square kilometres. The country is long and narrow, with more than 30 % of the land covered by forests, many rivers and lakes. Nearly half of the country is mountainous. Oslo is Norway´s capital with a population of about half a million people.

The People

There are close to 4.5 million Norwegians, most of whom live in urban areas. The Sami (formerly known as the Lapps) are the indigenous people of Norway. There are about 30,000 Sami in Norway. In Norway, foreign citizens accounted for 4.0 per cent of the total population in 1999.

The Government

Norway is a constitutional monarchy that adopted its own constitution on 17 May 1814. The present monarch, King Harald V, came to the throne after the death of his father Olav V in 1991. The Norwegian Parliament, the Storting, consists of 165 representatives who are elected for four-year terms. After the general election of 1997, its composition is as follows: Labour Party (65); Progress Party (25); Christian Democrats (25); Conservatives (23); Centre Party (11); Liberals (6); Socialist Left Party (9); Non-Partisan Coastal Party (1).

The Economy

Norwegian per capita income ranks among the world´s highest. North Sea oil and gas fields are one of the cornerstones of the Norwegian economy. Other major industries upon which Norway relies are the fisheries, pulp and paper, forestry, mining, manufacturing and shipping.


Stretching from 71°11'09'' N.Lat. in the north to 57°57'31'' in the south, the climate is milder than most people expect at those degrees of latitude. This is mainly because of the Gulf Stream, which brings warm seawater to Norway's coast. In Oslo the average daytime temperature (Celsius) ranges from –3.7 C in January to 18.2 C in July.

Information on Norway

More information on Norway can be found on the Internet on among others these web sites: www.dep.no/odin/global/language-no/index-b-n-a.html - and - www.tourist.no


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