Office workers in the Nordic region

Image courtesy: Unsplash

For several people, the Nordic countries (Finland, Denmark, Norway, Iceland, and Sweden) are attractive places to work due to their competitive salaries, good working conditions, and work-life balance.

The core principles of the so-called Nordic model are high gender equality, low degrees of economic inequality, low rates of unemployment, and equal opportunities in the field of education and healthcare. The state plays an active role in achieving these via redistribution of the resources through taxes and other methods.

Let’s take a look at the labour market in the Nordic region.

High Labour Force Participation Rates

The labour force participation rate is computed as the labour force divided by the total working-age population. In the Nordic countries, both men and women have high labour force participation rates. In 2022, the employment rate for people aged 25-64 in the Nordic region was as follows:

  • Sweden: 89.3%
  • Iceland: 88.5%
  • Finland: 85.2%
  • Denmark: 84.5%
  • Norway: 84%

These figures are better than 81.2% in the EU as a whole.

Labour Force Participation Rate

Image courtesy: OECD

Unemployment in the Nordic Region is lower than in the rest of Europe, which again makes Nordic countries a favourable destination for job seekers worldwide.

Gender Pay Gap Due to Sex-Segregated Labour Markets

Despite men’s and women’s high rates of participation in the labour force, a gender pay gap exists in the Nordic labour markets. You will notice that the labour markets in the Nordic region are extremely sex-segregated. More women take part-time work, which causes inequality in the number of hours worked, and ultimately, to lower lifetime earnings. This adversely affects women’s economic status.

Another noticeable thing is that women work primarily in female-dominated industries like health, care work, and education. Men are mostly engaged in male-dominated industries such as construction, agriculture, IT, transport, and utilities. This segregation also plays a part in the gender pay gap. But the wage gap is still lower compared to other countries.

Social Security and Innovation

The Nordic model of governance and welfare involves a public sector that provides citizens with a social safety net and welfare services. Due to the presence of labour unions, the labour market is highly standardised by collective bargaining agreements between these unions and employers.

The social security net encourages innovation in the Nordic countries as people can take risks, brainstorm to find innovative ideas and implement them, knowing well that it won’t pose a threat to whatever they have achieved or jeopardise their future. You can find several reputed Nordic brands and products that have made their presence felt due to individuals’ creativity and are now exported worldwide, e.g. Ikea, Volvo, and Lego.

Work-Life Balance

From supporting innovation and sustainability to investing heavily in education and research, the Nordic countries have taken several steps to enhance the quality of life and help people strike a work-life balance.

Since the Nordic business community, in particular, and society, as a whole, are geared towards providing opportunities that support both career development and social relationships, they play a crucial role in helping people achieve that elusive work-life balance.

Cross-Border Commuting

By 2030, the Nordic region plans to become the world’s most sustainable and integrated region. Cross-border labour mobility trends (such as commuting in the Øresund Region) present an interesting insight into the matter.

However, cross-border commuters make up a tiny proportion (less than 1% of the working population) of the total Nordic workforce. Sweden sits at the top with the largest proportion, while Iceland takes the second spot.


The digital revolution, an influx of immigrants, skills shortage, globalisation, and an ageing population give rise to considerable challenges for the Nordic region’s labour market and the Nordic welfare model. It remains to be seen how they are overcome to create a more integrated and sustainable Nordic market that can create a strong foothold in the global market and offer fewer barriers to people and companies operating across borders.   

If you need help finding local or cross-border talent in the Nordic countries, you can always count on us at InHunt World!

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