Tackling mental ill-health of the working-age population is becoming a key issue for labour market and social policies in many OECD countries. It is an issue that has been neglected for too long despite creating very high and increasing costs to people and society at large. OECD governments increasingly recognise that policy has a major role to play in improving the employment opportunities for people with mental ill-health, including very young people; helping those employed but struggling in their jobs; avoiding long-term sickness and disability caused by a mental disorder; and involving treating physicians more in job retention and rehabilitation.

Throughout the OECD, mental ill-health is increasingly recognised as a problem for social and labour market policy; a problem that is creating significant costs for people, employers and the economy at large by lowering employment, raising unemployment and generating productivity losses. This also applies in Norway which has the highest sickness absence incidence and disability benefit caseload in the OECD despite a traditionally strong work-first approach. In view of Norway’s economic performance as well as the high level of spending on health care and education, mental health-related inequalities seem very high. Norwegian policy makers recognise the need for action to prevent people from dropping out of the labour market with a mental illness and help those with a mental disorder in finding jobs. Accordingly, Norway has established a broad range of policies and reforms to tackle the exclusion of people with mental ill-health. These include a national strategy on work and mental health, developed jointly by the Ministry of Health and the Ministry of Labour; and the integration of the public employment service, the social insurance and parts of the municipal social assistance into a Labour and Welfare Administration (NAV), thus offering a strong structure for early intervention and co-ordinated support.

Norway combines a unique mix of a favourable economic and labour force situation and very high investments in education and health with a pervasive exclusion of people with health problems from the labour market. While the Norwegian system has generated a high and stable employment rate over the last decades, one-fifth of the population receives income supports due to health problems, and spending on disability and sickness benefits amounts to around 5% of GDP, by far the highest level in the OECD. The causes for this combination cannot be found either in a lack of vocational rehabilitation policies or a lack of elaborated support structures; both are well developed. Rather, the reasons lie in a political reluctance to revise a very generous social protection system; to implement effectively far-reaching changes introduced in the past decade; and to enforce new obligations rigorously.

This chapter refers to the key findings of the recently published OECD report Sick on the Job? and summarises the characteristics of people with mental health problems which contribute to the special challenges in job retention and labour market re-integration for this group. The high mental health-related employment inequalities in Norway are discussed and compared with those in other countries. The chapter also provides a description of some organisational characteristics of the systems involved.

This chapter provides an in-depth discussion of the development of sick leave against the background of the high level of long-term sickness absence which is the main route to disability benefit in Norway. The chapter discusses the increasing share of long-term sick leave due to milder mental disorders; the role of physicians certifying sick leave; and existing and possible new funding mechanisms for the costs of sickness absences. Finally, eligibility criteria for sick leave due to mental health problems and the use of partial sickness absence are questioned.

This chapter discusses the Norwegian disability benefit system and the possible reasons behind Norway’s exceptionally high beneficiary rates. The experience with temporary disability benefits, which were merged into a new benefit in the meanwhile, is analysed. Recommendations are given with respect to the assessment process, the eligibility criteria, the funding of the system, and the actual application and implementation of existing rules and regulations.

This chapter describes the use of vocational rehabilitation measures in Norway and discusses the effectiveness of these interventions for different target groups. Special focus is put on early intervention in the workplace, the support needs of employers and the role of the treating physicians. Recommendations are given on how the already sound vocational rehabilitation system can increase its effectiveness.

This chapter describes some key parameters of the inpatient and outpatient mental health care system in Norway with respect to consequences of the employment status of the patients. Possible ways to overcome the fragmentation between mental health care, rehabilitation and the disability benefit system are discussed. The chapter pays particular attention to the collaboration between the Labour and Welfare Administration, the District Psychiatric Centres, and the physicians in private practice. Finally, the importance and the availability of inter-sectoral data as well as the development of employment-related quality indicators and evidence-based steering mechanisms in the mental health system are discussed.

This chapter provides data about mental disorder prevalence, disability beneficiary caseloads and non-completion of upper secondary education in youth. It shows some diagnosis-related trends in the incidence of disability benefits in youth and discusses the balance between universal prevention measures on the one hand and targeted individual interventions at school on the other. Recommendations focus on possible ways to secure the transition from school to work and on the collaboration between the pedagogical school services and the mental health care system.