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Back to Work: Finland

Improving the Re-employment Prospects of Displaced Workers

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Job displacement (involuntary job loss due to firm closure or downsizing) affects many workers over their lifetime. Displaced workers may face long periods of unemployment and, even when they find new jobs, tend to be paid less  and have fewer benefits than in their prior jobs. Helping them get back into good jobs quickly should be a key goal of labour market policy. This report is part of a series of nine reports looking at how this challenge is being tackled in a number of OECD countries. It shows that Finland has a higher rate of job displacement than most OECD countries but that most of these workers find a new job again relatively quickly. However, those who do not face a considerable risk of long-term unemployment; with older displaced workers and those with a low level of education facing the highest risk. While labour market institutions in Finland serve most displaced jobseekers well, there is room to improve policies for those at risk of long-term unemployment or inactivity who would benefit from earlier identification of their problems and early, effective and well-targeted counselling and intervention.

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Assessment and recommendations

Finland is a small open economy relying on its strong human capital and on its close integration in the European and global economy. In this context, successful continuous restructuring and quick adaptation to global developments is vital for its prosperity. Finland is facing a difficult economic situation, with three years of recession in 2012-14 and only a slow recovery since, driven by a number of adverse shocks and structural factors in the aftermath of the global financial crisis: a significant contraction of the electronics sector, a secular decline of the traditionally very strong paper industry, and the sharp drop in exports to Russia (still a main trading partner) due to the imposed sanctions regime. At 9.4%, the unemployment rate in Finland was higher in 2015 than in the peak crisis years 2009 and 2010. The long-term unemployment rate is also at a new high of 2.7%.

English

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