Faces of Joblessness - OECD’s research sheds light on unemployment in Finland from a people-centered perspective
OECD’s research “Faces of Joblessness” identifies eight faces of joblessness in Finland. The research is acquired by the Ministry of Social Affairs and Health and Kela. The results will give insight on the social security reform.
OECD’s research examined employment patterns of working-age individuals (17-64) in Finland over the course of 2017 based on EU-SILC data.
Results in the report show that 27% of the working-age population face labour market difficulties. They are the target group of the report. Of the working-age population 18% did not work at all throughout the year, while a further 9% were only weakly attached to the labour market. They were occupying unstable jobs, working limited hours, or earning very little.
The results provide a map of the characteristics and employment obstacles of jobless individuals in Finland and the degree to which these barriers impede their return to work. The research maps out the main groups of individuals in Finland with similar support needs.
Eight faces of joblessness
The research identifies eight “faces” of joblessness including groups characterized as:
- Individuals who are no longer looking for work and largely live in rural areas (26% of the jobless)
- Individuals in unstable or intermittent employment and with limited employment barriers (20%)
- Early retirees with comparatively high skills but limited financial work incentives (12%)
- A group of mostly men, living in urban areas and actively seeking work despite health limitations (11%)
- Women with significant care responsibilities (10%)
- Young low-skilled individuals (9%)
- Prime-aged low-skill individuals (8%) and
- Individuals with significant non-labour income (4%).
People with weak labour-market attachment face multiple barriers – health limitations the biggest barrier in Finland
The report distinguishes three types of employment obstacles:
- barriers related to work capacity (skills, work experience, health, care responsibilities),
- incentive barriers (resulting from tax and benefit provisions or because of the availability of significant incomes that do not depend on own work effort) and
- job search barriers (e.g., limited availability of job offers).
Results indicate that health limitations, unsuccessful job search, and the availability of significant non-labour incomes are particularly prevalent in Finland, affecting 45%, 30% and 28% of the jobless population, respectively.
“Compared to other OECD countries, a large proportion of Finland’s jobless report poor health as a barrier to employment. Further work will be needed to unpack what is going on here, in particular the role played by mental health”, says economist and researcher Emily Farchy from OECD.
According to the research, many jobless Finns are confronted with complex and inter-related employment obstacles. Close to 70% face two or more employment barriers at the same time, and this share rises to 87% for those who are persistently out of work for 12 months or longer. According to the research 39% face three or more barriers.
For those with multiple barriers, policies focusing on addressing a single employment barrier in isolation may not have the intended effect on labour-market outcomes, the research suggests.
“In Finland, social benefits reach those most in need. However, especially in the context of the current crisis, it is essential that employment support is equally well targeted, and adapted to the multiple barriers that jobless people face”, states Stefano Scarpetta, Director for Employment, Labour and Social Affairs at OECD.,
Faces of Joblessness methodology maps out barriers that people face in practice
The report utilises the Faces of Joblessness methodology to identify those needing support based on the specific employment barriers that they face.
Traditional employment analysis relies on common labour-force statistics that tend to highlight broad characteristics, such as gender, age, or country of birth. According to the research, these are poor indicators of the particular barriers that people face in practice.
Correction made on 9 October 2020 at 15.50 to the press release issued on 8 October 2020. The press release incorrectly reported that one of the groups identified in the research consisted of a group of “mostly men, living in rural areas and actively seeking work despite health limitations”. This should, in fact, have read “mostly men, living in urban areas and actively seeking work despite health limitations”.