The labor market in Norway, 2000–2016

Abstract

Norway has a high labor force participation rate and a very low unemployment rate. Part of the reason for this fortunate situation is so-called “tripartism”: a broad agreement among unions, employers, and government to maintain a high level of coordination in wage bargaining. This has led to downward real wage flexibility, which has lessened the effects of negative shocks to the economy. Reduced net immigration, especially from neighboring countries, has also mitigated the negative effects of the recent drop in oil prices. A potential drawback of this tripartism is, however, the difficulty of reducing employee absences and disability.