The following OECD assessment and recommendations summarise Chapter 5 of the Economic Survey of Finland 2006 published on 4 May 2006.
After declining for some years the number of long-term unemployed started rising again in 2004 and has continued rising during most of 2005. The government’s goal is to raise the activation rate of active labour market programmes (ALMPs) to 30% by the end of 2007, from 23% currently, which would imply an increase by around 35 000 participants. While there is scope for improving the mix of ALMPs in favour of those that are most effective by providing more wage subsidies in the private and less in the public sector, it is not clear on the basis of current evaluations that an expansion will have a significant effect on regular employment. ALMPs should also be better targeted on older workers. The recent and planned expansion of the public employment service (PES) offices is to be welcomed if it leads to greater emphasis on job search support, counselling advice and obligations to participate in programmes after a period of job search. The performance of PESs should be monitored in these respects. A particular weakness of current ALMPs is the low coverage of older workers despite the government’s goal that older workers who became unemployed during or after 2000 should be encouraged to take up regular employment through training and rehabilitation measures. Also the activation of persons on disability schemes should be raised. In addition marginal effective tax rates when moving from unemployment to employment are high in international comparison. They should be reduced by tapering unemployment benefits at longer durations which are currently among the most generous in the OECD, unless obligations to participate in ALMPs are more strictly enforced.
Labour market performance
Source: Ministry of Labour, Finnish Labour Review, 4/2005; Statistics Finland, Statistical Yearbook of Finland 2005.
How to obtain this publication
The Policy Brief (pdf format) can also be downloaded. It contains the OECD assessment and recommendations, but not all of the charts included on the above pages.
The complete edition of the Economic Survey of Finland 2006 is available from:
For further information please contact the Finland Desk at the OECD Economics Department at firstname.lastname@example.org. The OECD Secretariat's report was prepared by Dave Turner, Asa Johansson and Laura Vartia under the supervision of Peter Hoeller.