Unemployment rate ‘artificially low’

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Norway has been boasting the lowest unemployment rate in Europe for months, but researchers now suggest the real numbers of Norwegians out of work are higher. Both the researchers and some opposition politicians think published jobless rates have been “artificially low.”

Prime Minister Jens Stoltenberg has been trying to keep unemployment low and create new jobs, like here at a job conference last fall. Now he's being told unemployment is really higher than figures have shown. PHOTO: Arbeiderpartiet

A new study reported by newspaper Aftenposten on Wednesday reveals that many people who have lost their jobs wind up on disability, because of subsequent health problems. Researchers note that three out of every 10 new cases of disability result from job losses.

That means unemployed persons are collecting disability payments instead of unemployment benefits, and thus don’t turn up in the unemployment rolls. Norway, meanwhile, has the highest rate of workers on disability in Europe. 

“Our study shows how large the grey zone is between disability and unemployment,” Professor Knut Røed told Aftenposten. “It documents that there are many who go on disability who wouldn’t have, if they hadn’t lost their jobs.”

Røed is one of the authors of the new study from the Ragnar Frisch Center for Economic Research at the University of Oslo, along with Bernt Bratsberg and Elisabeth Fevang. The title of their study is “Disability in the Welfare State: An Unemployment Problem in Disguise?”

Both the Frisch researchers in Oslo and researchers at the OECD (the international Organization for Economic Cooperation and Development) have concluded that Norway’s high disability rate means that Norway is “dressing up” its unemployment figures by letting those out of work be classified as disabled.

Some opposition politicians, like Siv Jensen of the Progress Party, have also questioned whether Norway’s jobless rate is really as low as the government claims. Unemployment in Norway is rising a bit this year and expected to be around 3.5 percent, compared to an average 8 percent in Europe and nearly 10 percent in the US.

A recent OECD study found that many of those who “are outside the workforce in Norway because of poor health would be considered unemployed in other OECD countries.”

“Many who are on disability really could be working,” said Røed. That’s bad news for Norway’s left-center, Labour Party-led government, which already has been trying to lower Norway’s high rate of sick leave.

Labour Minister Hanne Bjurstrøm conceded that the research indicates it “has been too easy” to qualify for disability payments. Her coalition government colleagues from the Socialist Left party (SV) disagree, blaming the high disability figures on the stress and health problems that can result from company restructuring and a tough work environment.

Views and News from Norway/Nina Berglund
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