The Unassuming Economist

The unemployment rate in Norway is one of the lowest among OECD countries. At the same time, according to an IMF report, absence from work due to sickness “is the highest among the OECD countries, and so is expenditure on health related benefits, which is more than 5 percent of GDP. About one-fifth of the working age population receives income supports related to health problems or disability, which is nearly everybody who is not working. Disability benefit recipients are thus sometimes considered as “disguised” unemployment or early retirement in Norway. This is not surprising; there is an inverse relationship among European countries between the unemployment rates and the disability benefit recipient rates; economies with low unemployment often have high disability rates, suggesting that the two forms of labor market insurance tend to be used as substitutes.”