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Activation Policies in Norway

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  • Nicola Duell
  • Shruti Singh
  • Peter Tergeist
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    Abstract

    This report examines the performance of the Public Employment Service (PES) and the effectiveness of activation strategies in Norway. It covers the role of the key actors in labour market policies, the placement function of the PES, the structure of benefits for the working-age population out of work and the related incentives and disincentives for taking up work, and provides an overview of the different active labour market programmes. Over the past few years, labour market conditions in Norway have been better than in most OECD countries, reflecting strong economic and productivity growth. The global financial and economic crisis and the significant decline in oil and gas prices observed since the second half of 2008 are affecting the short-term economic prospect, with some deterioration in labour market conditions. Despite its relatively strong labour market performance, the main challenge for Norway is to mobilise underutilised labour, as nearly a fifth of the working-age population is out of work and receiving health-related benefits. In contrast, the take-up of unemployment benefits has been limited despite their generosity – both in terms of duration and net replacement rates – by strict eligibility criteria and the implementation of mobility and other mutual obligation requirements in Norway. The Norwegian Government has put forward several major policy reforms to contain benefit dependency and to prevent people from leaving the labour market too early or on a long-term or permanent basis. In 2006, a new institution – NAV – was launched, merging the State PES and the National Insurance Administration, and bringing them together in front-line offices with municipal services providing coordinated services for all clients. Several other changes to activation strategies are also underway. The new NAV employment services are systematising their early intervention and follow-up strategies for all jobseekers. Greater incentives have also been built into labour market programmes in particularly for social assistance clients. In spite of these important reforms, there remain a number of challenges to counteract sickness absence. It is now widely recognised that long-term sick leave is the initial step to disability benefit in many OECD countries. Early intervention in the form of case-by-case monitoring of sickness absence in Norway – which requires collaboration between employees, employers and NAV – has so far not been successful in delivering the desired outcomes. Finally, vocationally disabled people represent the largest group of participants in labour market programmes. Half of them engage in lengthy retraining in mainstream education and training courses. But further efforts have to be made to tailor active programmes to the needs of this group as well as other jobseekers such as older workers and immigrants. Ce rapport examine la performance du Service public de l’emploi (SPE) et l’efficacité des stratégies d’activation en Norvège. Il analyse le rôle des acteurs clés des politiques du marché du travail, la fonction de placement du SPE, les dispositifs d’indemnisation de la population d’âge actif qui ne travaille pas et leurs effets sur la motivation de reprendre une activité ; il fournit un aperçu des différents programmes. Au cours des années récentes, les conditions du marché du travail ont été plus favorables en Norvège que dans la plupart des pays de l’OCDE, signe d’une forte croissance économique. La crise financière et économique généralisée et la chute importante des prix du pétrole et du gaz depuis la seconde moitié de l’année 2008 ont un effet sur les perspectives économiques à court terme, entraînant de fait une détérioration des conditions du marché du travail. Malgré un marché du travail relativement performant, réduire la sous-utilisation de la main-d’oeuvre reste le principal défit de la Norvège : presqu’un cinquième de la population d’âge actif qui ne travaille pas perçoit des prestations liées à l’état de santé. En dépit d’un régime généreux d’allocations de chômage – tant dans leur durée et qu’en termes de taux nets de remplacement – des critères d’éligibilité très stricts ainsi que la mise en place d’une exigence à la mobilité et autres obligations réciproques en ont limité l’usage en Norvège. Le gouvernement Norvégien a entrepris d’importantes réformes afin de restreindre la dépendance aux prestations liées à l’état de santé et éviter qu’un grand nombre de personnes ne quittent trop rapidement le marché du travail, à long terme ou de définitivement. En 2006, une nouvelle institution (NAV) a été créée, fusionnant le Service public de l’emploi et l’Administration nationale de la sécurité sociale norvégiens, et rassemblant les services sociaux des municipalités afin d’offrir à tous les clients un accès aisé et coordonné à l’ensemble des services. Plusieurs autres changements relatifs aux stratégies d’activation sont en cours. La nouvelle institution NAV développe une approche plus systématique d’intervention précoce et de suivi des demandeurs d’emploi. Pour une plus grande activation des bénéficiaires de l’aide sociale, de nouveaux programmes du marché du travail ont été mis en place avec des mesures plus incitatives. Malgré ces réformes importantes, un nombre de défis restent à relever pour endiguer l’absence pour raison de maladie. Dans la plupart des pays de l’OCDE, le fait est que les longs congés de maladie représentent le premier pas vers les prestations d’invalidité. L’intervention précoce dans le cadre d’un suivi de l’absence pour raison de maladie au cas par cas, qui requiert une coopération étroite entre employés, employeurs et la NAV, n’a pas abouti aux résultats attendus. Enfin, les bénéficiaires des prestations de réinsertion professionnelle représentent la majorité des participants aux programmes du marché du travail. La moitié d’entre eux participent à des formations de reconversion au sein de l’enseignement ordinaire. Plus d’efforts doivent être entrepris pour mieux adapter les programmes du marché du travail aux besoins spécifiques de ce groupe ainsi que d’autres groupes de demandeurs d’emploi tels que les travailleurs âgés et les immigrés.

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    Bibliographic Info

    Paper provided by OECD Publishing in its series OECD Social, Employment and Migration Working Papers with number 78.

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    Date of creation: 02 Mar 2009
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    Handle: RePEc:oec:elsaab:78-en

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    Cited by:
    1. Steinar Holden & Victoria Sparrman, 2011. "Do Government Purchases Affect Unemployment?," CESifo Working Paper Series 3482, CESifo Group Munich.
    2. Marie, Olivier & Vall Castello, Judit, 2012. "Measuring the (income) effect of disability insurance generosity on labour market participation," Journal of Public Economics, Elsevier, vol. 96(1), pages 198-210.
    3. Nicola Duell & Lucia Mýtna Kureková, 2013. "Activating Benefit in Material Need Recipients in the Slovak Republic," Research Reports 3, Central European Labour Studies Institute (CELSI).

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