OECD Economic Surveys: Finland

Frequency :
Tous les 18 mois
ISSN :
1999-0545 (en ligne)
ISSN :
1995-3488 (imprimé)
DOI :
10.1787/19990545
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OECD’s periodic surveys of the Finnish economy. Each edition surveys the major challenges faced by the country, evaluates the short-term outlook, and makes specific policy recommendations. Special chapters take a more detailed look at specific challenges. Extensive statistical information is included in charts and graphs.

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OECD Economic Surveys: Finland 2014

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Auteur(s):
OCDE
Date de publication :
12 fév 2014
Pages :
116
ISBN :
9789264219519 (EPUB) ; 9789264206762 (PDF) ; 9789264206755 (imprimé)
DOI :
10.1787/eco_surveys-fin-2014-en

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This 2014 Economic Survey of Finland examines recent economic developments, policies and prospects. Special chapters look at ageing and local public finances.

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    Basic statistics of Finland, 2012
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    Executive summary

    Strong growth, innovation and structural reforms in the decade preceding the global economic and financial crisis transformed Finland into one of the world’s most competitive economies, ensuring a high level of well-being for its citizens. More recently, however, competitiveness has deteriorated and output has fallen, as electronics and forestry collapsed. The latest settlement between social partners for modest wage increases over the next two years will help. More broadly, economic revival requires building on impressive human capital, strong institutions and sound macroeconomic and financial management to strengthen growth and increase integration in global value chains.

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    Assessment and recommendations

    Finland enjoyed over a decade of strong output growth led by the high-tech sector before the 2008 global financial and economic crisis. It is one of the most competitive countries in the world and its residents enjoy a high level of well-being. Finland ranks seventh in the World Happiness Report 2013 (Helliwell et al., 2013), and performs better than the OECD average in all dimensions of the OECD Better Life Index (). Income inequality is still among the lowest in the OECD. Social inclusiveness contributes to Finland’s high level of subjective well-being, personal security, civic engagement, governance and social connections. Jobs and earnings are close to the OECD average, despite recent output weakness, and the work-life balance is good. Housing conditions are better than the OECD average, but households are accumulating substantial debt to finance their dwellings, which increases their vulnerability and that of the financial system to economic shocks. Environmental quality is very high and rich natural resources, notably forests, offer a promising potential for green growth. Education is excellent, even though Finland has fallen slightly in the latest Programme for International Student Assessment (PISA) rankings (OECD, 2013a). Public health care coverage is extensive, although health status is average.

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    Progress in structural reform

    This annex summarises recommendations made in previous Surveys and actions taken since the OECD Economic Survey on Finland published in February 2012.

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      • http://www.keepeek.com/Digital-Asset-Management/oecd/economics/oecd-economic-surveys-finland-2014/the-economic-consequences-of-ageing_eco_surveys-fin-2014-4-en
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      The economic consequences of ageing

      Finland’s population is set to age rapidly in the coming decades. This will put pressure on public finances, while shrinking labour resources. Nonetheless, solutions exist to alleviate those pressures. Adjusting the pension age in line with the rise in life expectancy would reduce pension costs and increase older workers’ employment, provided it is accompanied by the removal of the pathways to early retirement. In order to allow people to work longer, labour market flexibility should be enhanced and lifelong training promoted further. Active labour market policies should be strengthened so as to increase the labour force participation of youth, childbearing age women and the long-term unemployed. Finally, ageing should not only be seen as a burden as it can also create opportunities for innovation and new markets and industries. Information and communications technologies, where Finland has a strong knowledge base, can help the elderly stay as autonomous as possible, which would contain long-term care costs and improve well-being.

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      Local public finances and municipal reform

      Finnish municipalities enjoy ample fiscal autonomy and provide or arrange the provision of a large share of public services. In recent years, their spending and debt has been increasing steadily, especially because of population ageing and increases in the cost of health care and social services. Furthermore, small municipalities are often struggling to align service provision with national standards. The government has launched a reform to create more efficient municipalities through voluntary mergers. Both international experience and costs per capita across Finnish municipalities suggest an optimal size for municipalities of over 20 000 inhabitants, at least outside remote areas. As mergers are to be voluntary, the outcome of the reform remains uncertain. If merger plans prove insufficient to achieve efficient public service provision, the government could impose mergers on smaller municipalities, especially around the main urban areas. Responsibilities of smaller municipalities could be scaled back in all functions where economies of scale and scope can be achieved. Policies also need to be flexible enough to allow restructuring of services after mergers. Partnerships between public or private entities to provide services could be developed further in some areas. Finally, the tax structure and fiscal rules should be enhanced to ensure long-term fiscal sustainability.

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