How can adverse trends in labour utilisation be reversed?

Norway has among the highest participation and employment ratios in the OECD, notably among women and older age groups, and one of the lowest structural unemployment rates. Yet, average hours worked are relatively low, probably reflecting the high participation rates among women, who typically demand part time work. But average hours worked have also declined faster than in other OECD countries largely, but not only, because of rising recourse to sick leave, as noted above.

Enhancing micro efficiency in the labour market is important in order for Norway to remain one of the best performing countries. Removing work disincentives from the benefit system, including those discussed above for sickness and disability, should remain the priority objective in this area. Recent measures reforming the unemployment benefit scheme - a reduction of the maximum duration and replacement rate for benefits, along with a tightening of eligibility requirements are further steps in the right direction.

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