Any country’s main asset is its workforce, and Norway, with its oil wealth, is no exception. Sustainable policies for low unemployment and high participation rates for women, men and young people are predominant and the burden sharing of the cost of the welfare state is carried on the back of the labour force.
In the last 50 years, there has been a tremendous change in women’s participation in paid work in most OECD countries. Labour market participation has been a key to economic independence for women. It has given women the possibility to develop and use their professional skills. Employment among women is also crucial for economic performance. This may prove especially important in the years to come, as an ageing population will place an increasingly severe burden on public finances. Old age pension expenditure will increase, as will government outlays for health care. Low birth rates will add to the problem, and a shrinking working-age population will have to provide for an increasing number of pensioners. To encourage women with children to go out to work, Norway and the other Nordic countries have implemented policies that make it easier to combine work and family life.
Now some 83% of mothers with small children are employed. Fertility rates have risen along with the rise in labour participation, from 1.75 children per woman at the end of the 1970s to 1.9 children per woman today–one of the highest fertility rates in Europe.
The increase in female employment in Norway took place at a time when there was a rise in demand for labour, and alongside a remarkable boost in educational attainment among women. Secondly, employment among women was stimulated by comprehensive parental provisions and subsidised day-care for children. In 1970 only 13,000 Norwegian children were enrolled in day-care centres. Today the number is about 280,000 with coverage of almost 90% of all 1-5 year olds. Parental leave for employed mothers and fathers is paid from public budgets and has been extended from 12 weeks 30 years ago to 47 weeks today. Other measures are a statutory right to paid leave to stay at home with sick children and a right to work part-time until the youngest child turns 12.
Choosing workers from a pool of male and female workers, as opposed to choosing from a pool where half of the potential talent is excluded, leads to productivity gains. Secondly, higher female labour participation has led to productivity gains through a higher degree of specialisation. And finally, female employment has added more workers to the work force at a time when average work hours per employed person have been declining. .
In fact, if the level of female participation in Norway were to be reduced to the OECD average, Norway’s net national wealth would, all other factors being equal, fall by a value equivalent to our total petroleum wealth, including the value of assets held in the Government Pension Fund-Global (GPG, formerly the petroleum fund).
The next step for Norway will be to find ways to encourage people to move from part-time work to full-time work. With family provisions and childcare already in place, this is within reach.
