Nordic Labour Markets

Nordic Labour Markets

On this theme page, you can find articles and films about the Nordic labour market(s).

National labour markets in the Nordic countries combine high levels of labour force participation with excellent systems of unemployment compensation and wage differentials are generally low. Nordic labour force participation rates are among the highest in the world, reflecting the primarily higher female labour force. However, the gap between the Nordic countries and the rest of the EU and the United States has been diminishing over the past decade.

The background and history to labour markets in the Nordic countries

In an article on the history of the labour movement, you can read about national Trade Union Confederations rising to prominence in Denmark, Norway and Sweden in the 19th century. However, the mid-19th century also saw migration from Norden, to for example the US, often to do with reasons of labour: 'Push factors' included, for example, limited farming opportunities and 'pull factors' included the promise of cheap or free land. 

At home, trade unions gained major influence on the Nordic countries’ political development. In Denmark,  the principle of collective bargaining was institutionalised with the September Agreement in 1899 and, thereafter, the other Nordic countries followed suit and adopted similar systems, cementing the structure of corporatism. In 1897, a Scandinavian Conference of Workers in Stockholm formed independent trade unions in all countries, removing direct Social Democratic influence over the trade unions. The political wing of the movement did not merely seek increased unionisation, but also greater equality as manifested in the struggle for universal manhood suffrage. 

Black and white photograph of a ship yardfrom 1939 with men walking

PICTURE: Workers leaving 'Arker Mek' in 1939, a workshop and shipyard in Oslo from 1841-1982. Picture retrived from The National Library o Norway (Nasjonalbiblioteket). Public Domain.

Solidarity, cooporation and flexicurity: 20th century

The labour movement also played a crucial role in the success of Social Democratic parties throughout the twentieth century; work and full employment was an espoused aim for these political parties.

More specifically to Sweden, you can read about wage earner funds in the 1960s and 70s that had the aim of redistributing profit amongst workers of individual employers or sectors. The Harpsund democracy was the Swedish practice of regular tripartite consultation between government, trade unions and businesses on major policy decisions, something that still takes place in Sweden, as well as in the other Nordic countries. Also, a solidaristic wage policy refers to the practice, noticeably carried out in Sweden during the 1950s, of limiting wages in the most profitable sectors and increasing wages in less profitable sectors, with the intention of achieving more equal wages nationally.

Close cooperation between the Nordic countries meant that workers could freely move between them from 1954. How early economic and labour cooperation came about is set out from a Danish and Norwegian perspective in separate articles, the latter in the article Nordic Cooperation 1947 – 1960: a Norwegian perspective). However, the early dream of NORDEK - a Nordic Economic Union (taken from the Swedish ‘NORDiskt EKonomiskt samarbete’in Swedish) was never realised.

Each of the Nordic countries has had a different relationship with the various European economic and common markets that have existed throughout the 20th century. In an article on economic integration, you can read that, while all the Nordic countries participated in the European Free Trade Area (EFTA) which was established in 1960, their different approaches to the common market became especially visible after the 1970s. Denmark joined the EEC in 1973. Norway planned to join but opted to remain outside the EC after a referendum in 1972. Sweden and Finland did not aim for full membership in the 1970s, but signed free trade agreements with the EEC in the early 1970s. In 1990s, the EFTA countries which remained outside the European Union except for Switzerland

Picture of blue flag with gold stars on. European Union flag

 (including notably Iceland and Norway) established the so-called European Economic Area (EEA) giving them access to the EU’s Single Market. Finland and Sweden ultimately became members of the EU in 1995. In 2009, Iceland applied to become a member of the EU, but subsequently withdrew its application. A more detailed historical account of Denmark’s relationship to the EU can also be read in the articles, ‘An overview of Denmark and its integration with Europe, 1940s to the Maastricht Treaty in 1993’ and ‘Denmark’s relationship with Europe since 2000’.

PICTURE: The Nordic countries have very different relationships with the European Union. While Finland, Denmark and Sweden are members, Norway, Iceland and the Faroe Islands and Greenland are not. Photo: Sara Kurfeß, Unsplash.

Corporatism is still prevalent in the Nordic countries, where, for example, interest organisations for both employees and employers are involved in tripartite discussions and negotiations in order to inform governmental policy formulation. This consultation reflects the importance of the major interest organisations in shaping and implementing policy, the assumption being that strong policy can be built on consensus between parties that may traditionally be deemed to have opposing interests.

The influence of trade unions also persists today, as more than 80% of all employees are covered by collective bargaining agreements negotiated between trade unions and employer confederations. Some may expect the state to have more influence on labour market actors, however, the value of allowing unions and employers - rather than national parliaments - to determine their own relationships has continued to be recognised in the Nordics throughout the 20th century and still is to this day. Since the 1970s, however, the labour movement has declined, something which can be be attributed to many things, such as the challenges of populism and by the left’s focus on other issues, such as feminism and discrimination.

Nordic labour markets: bringing it up to date

You can read about the economic development of the Nordic countries and the Nordic ‘model’ of capitalism. These countries are today among the richest countries in the world measured by GDP per capita and come top in more or less every international comparison of competitiveness. However, they do not resemble the ‘textbook model’ of efficiency as they tend to have large public sectors, extensive and generous welfare systems, and a high level of taxation in the Nordics.

In the article on labour markets in the Nordics, you can read about how Nordic labour participation rates are among the highest in the world and that unemployment rates are generally low. Unemployment compensation is generally designed to provide a safety net, compared to other parts of the world at least, and active labour market policies are important; work is considered valuable to society and individuals. It is not assumed that the market is a self-equilibrating system in which everyone seeking work will ultimately find a job and active measures are taken to help them.

Trade union membership remains high in all the Nordic countries, especially because union membership in Denmark, Sweden and Finland is – on the whole – still linked to the unemployed compensation system (the Ghent system). However, unemployment compensation schemes that are independent of trade unions are becoming more common and, with specific reference to Finland, there is an article about how precarious workers often prefer these schemes as they are cheaper. The unemployed compensation systems also relate to the concept of flexicurity, a welfare state model that combines a flexible labour market with security and benefits for workers.

Available research on Nordic labour markets continues to be rich and varied, and we host an increasing number of up to date articles on policy and workplace issues. For example, you can read about how employment and unemployment rates have influenced immigration policy in Denmark specifically in the latter part of the 20th century, which still has ramifications today. Another example is when organisational challenges can mean staff resort to making quick decisions about clients that are more likely to be influenced by racial bias in Swedish Welfare institutions in the 21st century.  

Critical perspectives also include the continued gender segregation in the Nordic labour markets. In fact, the Nordic countries have greater horizontal segregation levels than the rest of the the European Union, which means that the highest proportion of women work in different sectors than men. Men dominate the private sector whereas women are overrepresented in public sector jobs. The segregation levels have been historically stable, although small increases of women in male-dominated professions have taken place in recent years.

Here is a list of articles, in the order that they have been published, that are to do with the Nordic Labour Markets theme:

A recent demonstration by nurses in Copenhagen with banners saying "We are worth more. Increase wages" (Vi er mere værd. Lønløftet). Photo: Signe Hagel Andersen.

2021.04.21 | Article, Astrid Elkjær Sørensen, Gender, Public policy, Labour markets, Aarhus University

Unequal pay in Denmark: The impact of an outdated law

Danish nurses still receive 10-20% less in pay than male-dominated professions requiring a similar level of education. There are many contributing factors to unequal pay, but a recent report from the Danish Institute for Human Rights found that one key reason is the effect of the 1969 Public Servant Reform Act which saw nurses and other…

Cathie Jo Martin is Professor in Political Science at the University of Boston.

2021.04.15 | Podcast, Cathie Jo Martin, Education, Labour markets

Denmark: Uncovering Nordic Collectivism with Cathie Jo Martin

Examples of a collective mindset include: Denmark’s introduction of the earliest mass education system in the world in 1814. Nordic social democracy in the 20th century had full employment as a key aim. Different national organisations which represent employers on the one side and workers on the other (the social partners) have managed…

Family photo taken in 1944 in Helsingfors Finland. After the Second World War, smaller nuclear families became more widespread as a societal model. Photo: Helsingfors Stadsmuseum. CC-BY-4.0

2020.06.03 | Article, Byron J. Nordstrom, Labour markets, Governance

An overview of population trends in the Nordic countries since the Second World War

The Nordic countries have seen a number of important changes to their populations since the end of World War II. Perhaps most notable among these are growth, increased diversity, and gradual aging. Labour migration has also played a role and detailed people registers mean that research of all kinds can be undertaken with accessible and…

Guest workers striking against forced redundancies in front of DA (the Danish Employers' Association), 1978. Photo: Arbejdermuseets Arkiv (The Workers Museum's Archive).

2019.11.07 | Article, Niels Wium Olesen, Astrid Elkjær Sørensen, Thorsten Borring Olesen, Rosanna Farbøl, Labour markets, Minorities, Aarhus University

Danish immigration policy, 1970-1992

In 1973, the Social Democrat government introduced an immediate stop to labour immigration because of growing unemployment. Immigration was, however, not a particularly problematic subject in the political and public debate in the 1970s. From the beginning of the 1980s, more refugees came to Denmark, particularly from the Middle East and the…

Attitudes of welfare professionals are not only shaped by societal or macro processes but also organisational conditions. Photo:

2019.10.31 | Article, Carolin Schütze, Labour markets, Research, Copenhagen Business School

It's relational: Racial attitudes in Swedish welfare institutions

Racial bias of staff at welfare institutions can result in negative outcomes for minority clients. Staff are not only professionals, but also individuals with personal beliefs and values. While the overriding organisational culture may be to give equal services to all clients, the attitude of staff and other work pressures might influence their…

Picture: Emigrants in Larsen's Square. Edvard Petersen, Public Domain (ARoS Aarhus Art Museum).

2019.07.17 | Article, Byron J. Nordstrom, Labour markets, Economy

Emigration in the Nordics: an overview since 1800s

Emigration has been a part of population mobility in the Nordic region for centuries. The numbers were generally very small until the mid-nineteenth century when a wide variety of 'push factors', such as limited farming opportunities, and 'pull factors', such as the promise of cheap or free land, led to mass migration from Norden. In the…

Employers' federations in the Nordics have since early 1900s taken part in collective bargaining over workers' conditions.

2019.07.10 | The Quick Read, Byron J. Nordstrom, Labour markets

Employer federations in the Nordics

Along with their trade union counterparts, employer federations have been key players in the negotiation of nationwide agreements on wages and working conditions, as well as contributors to governmental policy formulation. In addition, this collaboration has served at times to obscure the focus of employers’ federations on economic growth and…

Even though the Nordic countries have high levels of gender equality, the caring professions, such as working in daycare or with the elderly, are dominated by female workers.

2019.02.22 | Article, Astrid Elkjær Sørensen, Gender, Labour markets, Aarhus University

Gender segregation in the Nordic labour market

Since the 1960s the Nordic countries have been renowned for their high level of gender equality as they have amongst the world’s highest employment and education rates for women. At the same time the Nordic countries also have greater horizontal segregation by sex than the rest of the EU, that is, most women work in different occupations than most…

National trade union confederations have played an important role in Nordic society and politics throughout the twentieth century. Today, their role is increasingly challenged.

2019.02.19 | Article, David Redvaldsen, Labour markets

Labour movement in the Nordic countries

The 'labour movement' refers to the network of political, industrial, voluntary, educational and recreational organisations with a socialist or labour ethos. From the late nineteenth century, its aim was to improve living and working conditions for blue-collar workers and their families, and was organised around national trade union…

Despite being latterly less popular, Nordic trade union confederations still provide millions of workers with advice and the public with information. Photo: a graph by the Swedish LO showing the percentage of unionisation by work type and gender.

2019.02.18 | Article, John Logue, Labour markets

Trade unions in the Nordic countries

Trade unions play a more important role in Nordic politics and economics than they do in most other countries. This is largely a result of their organisational success, which has made them key actors in policymaking as well as in collective bargaining.

Showing results 1 to 10 of 12

1 2 Next

The Nordic region introduced free movement of workers already in 1954.

Further reading

  • Anette Borchorst, ‘Woman-friendly policy paradoxes? Childcare policies and gender equality visions in Scandinavia’ in Kari Melby (ed) Gender Equality and welfare politics in Scandinavia – the limits of political ambition (Bristol: The Policy Press, 2008).
  • Bernhard Ebbinghaus and Jelle Visser. Trade Unions in Western Europe since 1945 (London: Macmillan, 2000).
  • Eric S. Einhorn and John Logue, Modern Welfare States: Scandinavian Politics and Policy in the Global Age (New York: Praeger, 2003).
  • Eric S. Einhorn and John Logue, ‘Can Welfare States Be Sustained in a Global Economy? Lessons from Scandinavia’Political Science Quarterly, 125, 1 (2010), pp. 1-29.
  • Norbert Götz, ‘Century of Corporatism or Century of Civil Society? The Northern European Experience’, in N. Götz and J. Hackmann, eds., Civil society in the Baltic Sea region (Aldershot: Ashgate, 2003).
  • Søren Kaj Andersen, Jon Erik Dølvik and Christian Lyhne Ibsen, Nordic Labour Market Models in Open Markets, Report 13 (Brussels: European Trade Union Institute, 2014).