The Finnish government is on the verge of reaching its once-ambitious employment rate target of 72 per cent, with the latest employment statistics showing that the trend of the employment rate stood at 71.7 per cent in September.
Etla, the Research Institute of the Finnish Economy, believes the increases in employment and productivity are a consequence of several simultaneous developments.
“It is our estimate that roughly a half of the increase of over 100,000 in the number of jobs since mid-2015 is a consequence of policy measures adopted during the current electoral term – namely the competitiveness pact and reforms promoting the availability of jobs,” the research institute states in its report on past economic growth and future growth opportunities in Finland.
The effect of policy measures is even larger if also the pension reform implemented during the previous electoral term is taken into consideration, according to Etla.
“The rest is due to external demand and other economic adjustments,” it says.
Etla also states in its report that although it is realistic to assume productivity growth will continue at an annual rate of roughly two per cent for the next five years, the assumption is conditional on the employment rate creeping up closer to the levels of other Nordics.
It points out that additional structural reforms are required to raise the employment rate to around 75 per cent and sustain productivity growth at around two per cent. The reforms, it adds, must be more ambitious than the ones carried out in recent years due to, for example, changes in the international environment.
Aleksi Teivainen – HT
Source: Uusi Suomi