4. Activating and using immigrants’ skills in Norway
This chapter examines immigrants’ employability and access to work. It focuses first on labour market outcomes of the low-educated and the employment situation of immigrant mothers. It looks at job quality, including income, involuntary part-time and formal over-qualification. It thereafter examines public support and re-activation efforts, including through upskilling and second-chance programmes and concludes with a discussion on policies to combat discrimination.
This report was largely completed before the Russian aggression against Ukraine. Norway swiftly adapted its integration framework to accommodate for the specific challenges arising from the inflow of refugees from Ukraine. These measures are discussed in a separate chapter (Chapter 6).
Immigrants’ attachment to work varies over time and with their duration of stay in the country. Foreign-born are more vulnerable to labour market shocks and often the first to become unemployed in times of economic shocks, such as the one associated with the COVID-19 pandemic. In addition, multiple other reasons drive varying attachment to work over a person’s life cycle, including skills, health, family priorities and personal preferences. Using and activating the existing skills of immigrants is thus not only a task at arrival. Ensuring employability and labour market integration in Norway also means providing pathways to work and education as well as second chances for those who have been in the country for longer.
In Norway, as in most other European countries, EU-born immigrants have a higher employment rate than non-EU-born immigrants. One reason being that the bulk of the former have come for employment, while a large part of the non-EU-born group consists of humanitarian migrants and their families, who often have lower levels of educational attainment and less transferable work experience. Their integration thus takes time. However, even after ten years or more in the country, non-EU-born immigrants in Norway, as elsewhere, have markedly lower employment rates compared to their EU-born peers. Compared to other OECD countries, and regardless of duration of residence, EU-born migrants have a comparatively high employment rate in Norway, while non-EU-born migrants are similar to the average (Figure 4.1).
Note: Settled refers to 10 or more years of residence in the country. The OECD total considers the countries included in the graph.
Source: EU Secretariat calculations based on EU LFS 2019 and 2020.
Employment rates over time differ by migration category
Norwegian data suggests that the category of admission, in other words, whether migrants came to Norway for education, work, family or humanitarian reasons, shapes the employment rate much more than the region of birth. Interestingly, the employment rate of family migrants joining a non-refugee develop very similarly irrespective of their place of birth (Figure 4.2). Likewise, labour migrants have a high and stable employment rate, regardless of whether they come from an EU or non-EU country. Immigrants coming to Norway for education are a special category. Most of them attend full-time education in the first years after coming to Norway and therefore have low employment rates, but four to five years after arrival they catch-up and surpass the employment rate of any other immigrant group. In turn, the employment rates for refugees and family migrants to refugees evolve more slowly and stay well below the employment levels of other immigrant groups, even ten years after arrival.
Source: OECD Secretariat calculations based on data from SSB, 2021.
Immigrants with low formal education levels face difficulties
Education is an important factor for migrants’ labour market integration in Norway. In international comparison, the employment rate for the low-educated foreign-born in Norway is particularly poor among men, both EU-born and non-EU-born (Figure 4.3). By contrast, among the highly educated, the employment rate is higher than the respective OECD averages for both genders and for those born in the EU as well as those from a non-EU country. One important reason for this, as discussed in Chapter 2, is Norway’s knowledge-intense labour market where employment options in low skilled jobs are limited.
Note: The graph is sorted by the employment rate of EU-born immigrants. Low-educated refers to ISCED 0-2. The OECD average considers the countries included in the graph.
Source: OECD Secretariat calculations, based on combined data from EU LFS 2019 and 2020.
Data from working aged foreign-born by admission category and gender in Norway point in a similar direction. Interestingly, the employment rate of low-educated migrant men living in Norway for ten years or more is lower than for those with 5-9 years of residence, regardless of admission category. By contrast, among those who have at least some secondary education (ISCED 3+), only among refugee men a similar pattern prevails (Figure 4.4).
The pattern of first increasing and then again declining employment rates for men has also been observed in longitudinal studies (Bratsberg, Raaum and Røed, 2017[1]). The reasons behind this worrying picture are not entirely clear, but the fact that it is not observed for those with at least upper secondary education does suggest that much could be gained by making sure that as many migrants as possible reach a secondary education level.
Note: Includes all foreign-born who arrived as adults (18+) till 2018 of working age. For the foreign-born arriving for education purposes or as labour migrant this trend is not detectable, they are therefore not shown in this graph. Their outcomes are higher the longer they are in Norway. The vertical line refers to the native-born population.
Source: OECD Secretariat calculations based on SSB data, 2021.
Employment trajectories differ greatly between men and women …
Besides the category of admission and educational attainment, gender plays an important role in labour market integration. While there is no major difference in employment outcomes between male and female labour migrant, large gender differences exist among family and humanitarian migrants in the years following their arrival in Norway (Figure 4.5).
For example, the employment rate of migrant women who had joined a non-refugee partner in 2015 was 60% in 2019 (after 4 years of residence), a full 20 percentage points lower than among migrant men in the same admission category. Gender gaps are even larger for refugees and family to refugees. Among the refugee cohort arriving in 2015, only 29% of women but 57% of men were employed after 4 years. Women who join a refugee partner in Norway had equally low outcomes (28%), whereas men joining a refugee partner reported a much higher employment rate (65%). As a result, the gender gap among family migrants to refugees is the largest – a striking 37 percentage points.
Source: OECD Secretariat calculations based on SSB data, 2021.
… as some migrant mothers struggle to reconcile work and childcare
A key issue related to the employment of foreign-born women in Norway is childcare. Immigrant women are more likely to have small children in the household than native-born women, as generally they are younger and tend to have higher fertility. In 2019, 25% of immigrant women aged 15 to 44 had small children compared to 20% of native-born women. Overall, however, immigrant mothers in Norway have been doing comparatively well. In 2019, 57% of immigrant mothers with small children from non-EU countries were employed, one of the highest rates in OECD-Europe (Figure 4.6).
Source: OECD Secretariat calculations based on EU LFS 2019 for all countries except Norway. For Norway, data from SSB, 2021 for year 2019.
However, for some immigrant mothers a labour market penalty for having small children exists. Immigrant women who have been in Norway for at least five years and who have a child below 6 are less likely to be employed compared to women without a young child. The employment penalty associated with having young children is largest among mothers who arrived as refugees and family migrants to refugees, at around 10 percentage points (Table 4.1). However, this is not particularly large in international comparison. On average across the EU, for example, the difference in employment rates between immigrant women with and without small children amounts to about 20 percentage points (OECD, 2020[2]).
Earlier research from Norway has shown that refugee women often get pregnant shortly after arrival, thus delaying their entry into the labour market (Tønnessen, 2014[3]). In contrast, women who came to Norway for study or work face only small penalties associated with having small children in the household. For family migrants to non-refugees, the difference amounts to 4 and 7 percentage points for EU and non-EU immigrants, respectively.
Refugee women in Scandinavian countries tend to have better outcomes than their peers elsewhere, and the tailor-made and multi-year integration programmes in the Nordics offer an important explanation (Liebig and Tronstad, 2018[4]). Prior to 2021, participants risked losing their right to language training and social studies when on parental leave. With the new Integration Act, important changes have been made to ensure that women do not lose time in the programme due to childbirth, with parental leave added to the programme´s duration.
More generally, migrant women with small children require flexible arrangements in terms of time and organisation. In interviews with women participating in the NIP, proximity and easy access to childcare were stressed as major determinants of their ability and motivation to participate in the programme (Bredal and Orupabo, 2014[5]). One possibility to provide for more flexibility is to pilot a scheme allowing participants to take the Introduction Programme on a part-time basis. Today, the programme is designed and delivered full-time, i.e. 30 to 40 hours a week. Municipalities already have a great degree of freedom to design and create a programme that suits participants’ individual needs. However, previous studies suggested that women with childcare responsibilities often risked obtaining less ambitious integration measures in the past (Djuve, Kavli and Hagelun, 2011[6]), for example by receiving less vocational job-training, which has proven particularly helpful for increasing the employability of low educated migrants (Orupabo and Drange, 2015[7]). The situation is similar in Sweden, where job-seeking efforts are mainly targeted at men participating in the Introduction Programme, whereas health and rehabilitation efforts are mainly targeted at women (Dahlin, 2017[8]). To which degree this is still the case is not known.
As mentioned, family migrants admitted as family to refugees are obliged to take part in the Introduction Programme as long as their partner has not been in the country for more than five years, but for other family migrants municipalities decide if they offer participation. This means that many family migrants – predominantly women – receive less integration support (see Chapter 3).
Efforts to ensure that immigrant women with small children keep in touch with mainstream services and are continually engaged is needed to prevent potential isolation and labour market disengagement. Local out-reach programmes offering networks and integration support can help identify and reach out to stay-at-home immigrant mothers. One such project is the “District Mother”, a concept adapted from the German “Stadtteilmütter” and introduced in Norway in 2016. The project has trained 150 immigrant mothers to reach out and provide information to support stay-at-home immigrant mothers. The aim is to improve immigrant mothers’ connection to Norway by providing information on available social services, the Norwegian labour market, and support concerning parenthood and health. The project aims to bridge the gap between women and the public by maintaining close and regular co-operation with the municipality (Bydelsmødre, 2021[9]).
Different family traditions and personal preferences of parents influence parental leave uptake. This is evident when looking at women born in Norway, but some born to immigrant parents, and some born to native-born parents (Table 4.2). Native-born women, aged 15-to-44, with immigrant parents and children under the age of six had significantly lower employment rates than their peers without children. This is a larger difference, than that between native-born women with native-born parents where the impact of having small children on their employment rate was only 3 percentage points.
The effect of small children on mother’s employment rate varies depending on the parents’ country background. The largest difference was observed among the native-born offspring of immigrants who themselves were born in Asia and Africa. (Statistics Norway, 2021[10]).
Finally, comprehensive parental leave arrangements, including for fathers, support gender equality and high employment rates among women. Immigrant fathers’ lower employment rate together with the current set-up of the Norwegian parental leave scheme may, however, impact the up-take and access to parental leave of immigrant fathers’ negatively, thus raising concerns about gender equality in the long-term (Box 4.1).
The purpose of the parental benefit scheme is to compensate for the loss of income, when parents are at home taking care of their infants/small children. Parents in Norway are entitled to a combined 49 weeks of paid parental leave when a child is born or adopted. Hereof, 15 weeks are reserved for each parent while the rest can be freely divided among the partners. Access and compensation are conditioned on prior employment and earnings.
Fathers’ access is to some extent conditioned on the mothers’ eligibility, in other words, her earnings and employment prior to childbirth. Most mothers fulfil the economic criteria (pensionable income for six of the last ten months, earning a minimum of 53 200 NOK (social benefits included) while being a registered member of the national insurance scheme). However, among those that do not qualify, immigrant mothers are overrepresented. Mothers who do not fulfil the employment and earnings requirements receive a lump sum instead of paid parental leave. In 2014, this was the case for 45% of immigrant mothers from Asia and 64% from Africa compared to only 8% among native-born mothers. As a consequence of mothers not meeting the requirements, fathers do not have equal entitlement to parental leave as men whose partners meet the requirements.
Yet, even if the mother does not fulfil the economic criteria, and does not qualify for parental leave, the father may still have access to the 40 weeks of parental leave. This applies in cases where the mother is occupationally active such as taking a publicly approved full-time education, combines work and approved education on full-time basis, participates in the Introduction Programme or the Qualification Programme on full-time basis or if the mother is unable to take care of the child because of illness or injury. Recent research following the parent cohort with children born in 2011 found that 90% of the native-born fathers were entitled to parental leave from 2011 to 2019 (the period this leave can be taken), compared to only 48% of foreign-born fathers from a non-Western country. For immigrant fathers from Western countries, the corresponding share was 73%.
When looking at the reasons for the fathers’ ineligibility to parental leave and the father quota, it is most often because neither of the parents qualify for the benefit due to low employment. In 45% of the non-Western immigrants-couples none of the parents were entitled to parental benefits, compared to 8% among the native-born. The share of fathers that were entitled to the benefit but could not access it due to the mothers’ inactivity, was 3% among the non-western fathers and below 1% among the native-born.
The parental leave system in Norway is overall similar to that in other Nordic countries. One exception is Sweden, where the fathers’ access is not dependent on the mother´s eligibility. In a comparison between Sweden and Finland, Sweden´s more flexible parental leave scheme shows smaller gaps between native and immigrants in take-up of parental leave.
Recent legislative changes in Norway will entitle fathers with children born after 2 August 2022 to 8 weeks of parental leave independent on the mothers’ occupational activity.
Source: (Line Schou, 2019[11]; Ellingsaeter, Kitterød and Østbakken, 2020[12]; Tervola, Duvander and Mussino, 2017[13]).
Migrant women are often trapped in involuntary part-time work
The reasons for working part-time are often complex and vary for people in different stages of the life cycle. Working part-time gives employees the opportunity to adapt their working hours to their own preferences, health, family situation and life stage. However, part-time work may have adverse effects for those who want to work full-time to secure income and the associated employee rights. In many OECD countries, part-time work is also a gender equality issue.
In Norway, like in most other countries, immigrant women, are overrepresented in part-time jobs. This holds particularly for women born outside the EU, where, according to the European Labour Force Survey, four in ten employed (currently not in education) work part-time (41%) in Norway. This is 10 percentage points higher than the number for native-born employed women. Over time, the share of native-born women in Norway working part-time declined from 39% in 2009 to 31% in 2019. Yet, among non-EU-born women the part-time share remained stable at 41% over the same period, and among EU-born women it increased by 4 percentage points. As a result, the gap in part-time work between native- and foreign-born women has widened considerably compared to a decade ago.
In Norway, almost one in two non-EU immigrant women state the inability to find a full-time job as the main reason for working part-time, while only one in three EU-born and one in five native-born women do. Native-born women working part-time more often indicate care responsibilities (either for children or other family members) compared to non-EU immigrant women (20% versus 8%). Attending some form of part-time education (excluding regular education) was equally common in both groups (7/6%).
Many immigrants work in occupations requiring lower skills…
Norway has a labour market demanding highly skilled workers. More than half of all jobs are in high-skilled occupations, requiring at least short-term tertiary education (Figure 4.7). While immigrants constitute about 19% of the employed population (aged 15-64), they are underrepresented in high-skilled occupations. Only about 13% of all positions demanding at least short-term tertiary education are filled by foreign-born workers, predominantly EU-born immigrants.
Source: OECD Secretariat calculations based on EU LFS 2019.
Indeed, Norwegian register data shows that most of the native-born population works in high-skilled jobs (52%). The situation is similar among the foreign-born who came to Norway for educational purposes, with 54% working in high-skilled occupations. By contrast, most migrants coming to Norway for reasons other than education are employed in medium-skilled jobs (ISCO 4-7). Refugees are most likely to be employed in low-skilled occupations (29%), followed by family migrants to non-refugees (27%) and labour migrants (26%). Among family migrants who join a refugee, the share of those working in low-skilled jobs is slightly lower (23%) (Figure 4.8).
Note: Data only includes individuals in jobs where the skill level is known. In no groups is the skill share of unknown over 6% of totals. NB: native-born, FB = foreign-born.
Source: OECD Secretariat calculations based on SSB data, 2021.
… and the foreign-born are overrepresented in household services, hospitality, and fishing
When compared to the OECD average, sectoral concentration of the foreign-born is not particularly strong in Norway. Additionally, while the sectoral concentration of migrants increased in most OECD countries from 2005 to 2018, this was not the case in Norway (OECD, 2020[2]). Nevertheless, immigrants are strongly overrepresented in some sectors. In 2019, immigrants made up 50% of the workforce in food and beverage service activities as well as 71% of those working in the cleaning industry. They also accounted for over three-quarters of employees in private households. In 2019, about one in ten immigrants worked in construction accounting for about 22% of the overall workforce in the sector. Furthermore, immigrants made up about 40% of all hotel employees in Norway and 50% of those working in the fishing industry. What is more, these shares are likely underestimations as the figures do not include seasonal and temporary workers (Friberg and Midtbøen, 2017[14]).
Recent migrants in Norway are strongly overrepresented in the hospitality sector, with 13% of all newcomers working in this industry around 2018, compared to 2% of natives. The difference between the native-born and recent migrants in the hospitality share was one of the largest OECD-wide. Settled immigrants (living in Norway for at least 10 years), on the other hand, mostly worked in domestic trade such as the wholesale and retail trade sector, with similar sectoral employment rates as the native-born (11% and 13% respectively) (OECD, 2020[2]).
Formal over-qualification rates are high, especially among family migrants
Formal over-qualification, defined as having attained a high level of formal education (ISCED 5-8) while working in a job that requires only low levels of educational attainment (ISCO 4-9), is substantial in many OECD countries. While only a low share of tertiary educated natives in Norway work in a job below their formal qualification level, this is quite often the case for immigrants, regardless of origin (Figure 4.9).
Note: The OECD average is the weighted average of the countries shown in the graph.
Source: OECD Secretariat calculations based on EU LFS (2019), 2021.
Indeed, closer analysis has shown that higher formal over-qualification rates of immigrants are a structural issue across occupations, countries of origin, and gender (Larsen, Rogne and Birkelund, 2018[15]). Norwegian register data show that the incidence of over-qualification is highest among refugees and family migrants to non-refugees with one in two tertiary-educated employed being formally overqualified for their jobs.
Interestingly, tertiary-educated family migrants to non-refugees are more likely to be overqualified for their jobs than their peers who joined refugees. This might at least in part be due to a lack of support as the former are not eligible for the Introduction Programme. Many of the family migrants concerned are also not eligible for free language training.
An important factor influencing the chances of being formally overqualified in Norway is the place of residence. Highly educated immigrants who live in urban centres tend to have lower incidences of over-qualification (33%) than those settled in medium sized urban areas (45%) and rural regions (56%). While there is also an urban-rural difference for the native-born, it is much less pronounced (15% vs. 21%).
An interesting observation is that employed immigrants with a Norwegian degree no longer face a higher over-qualification than their native-born peers (Figure 4.10). Immigrants who had arrived for education purposes at least five years earlier also have a high employment rate, 87%, equal to the one among tertiary educated natives in 2019. This suggests that the main issue is the transferability of foreign qualifications, either due to lower skill levels associated with such education or to lack of transparency about their actual value. Analysis of data from the OECD Survey of Adult Skills shows that, controlling for actual skills and language knowledge, differences in wage returns to education between domestic- and foreign-educated immigrants in Norway are particularly (OECD, 2018[16]). This in turn suggests that much could be gained by enhancing transparency through recognition and bridging (see Chapter 3).
Note: The date of first entry into the country is used as a proxy to calculate a degree obtained in the country. As a result all native-born are treated as having earned a national degree, in fact an overestimation of this group. The OECD average is the simple average of the countries shown in the graph.
Source: OECD Secretariat calculations based on EU LFS, 2019.
Many immigrants have relatively low income and are more likely to face relative poverty
Norway has one of the highest income levels in the OECD. Especially in absolute terms, immigrants in Norway enjoy high levels of income. In 2019, the median income of non-EU-born immigrants over the age of 16 was around EUR 23 000, compared to EUR 28 000 among EU-born and EUR 30 000 among natives in Norway (per person adjusted for 2017 PPP in EUR). As a result, the median income of non-EU-born immigrants in Norway was higher than that of most EU-born and native-born in many other OECD countries (OECD/European Union, forthcoming[17]).
The high income levels are also mirrored in high wage levels, which are a key reason why Norway attracts many labour migrants. In 2004, when Norway opened its labour market for the then new EU member countries from Central and Eastern Europe, the Norwegian labour market experienced what can best be described as a supply shock, with large numbers of immigrant newcomers arriving in Norway with low reservation wages. As a result, wages increased more slowly in sectors with high immigrant employment, such as in construction (Bratsberg and Raaum, 2012[18]). Research confirmed that labour migration from new EU member states led to higher wage inequality in Norway (Slettebak, 2020[19]). Some policies have been implemented to tackle the issue (see below), but despite these efforts there remain substantial wage differences between the native- and foreign-born.
Despite having high wages in absolute terms, about one in four non-EU-born immigrants in Norway is in the lowest income decile. What is more, the income gap between the native-born population and immigrants is large (Figure 4.11).
Note: Data was collected in 2020 but refers to reference year 2019. Distribution of income calculated by person.
Source: OECD Secretariat calculations based on EU SILC and DEU SOEP, 2021.
Immigrants in virtually all OECD countries face higher risk of relative poverty than their native-born peers (OECD/European Union, 2018[20]), and Norway is no exception. In 2019, about one in ten native-born adults in Norway lived at-risk-of-relative poverty compared to almost one in four (24%) foreign-born adults. Among non-EU immigrants, the respective share was 31%. Higher at-risk-of-relative poverty levels among immigrants can partially be attributed to their lower employment levels. Hence, comparing relative incomes among the employed after accounting for social transfers provides additional insight.
Interestingly, employment does not seem to protect immigrants well from poverty. Immigrants in employment in Norway are almost three times as likely to be at-risk-of poverty as their native-born peers. Immigrants’ at-risk-of in-work poverty rate is slightly below the EU average but higher than in comparable countries (Figure 4.12). Previous research concludes that there are very few people in Norway who live at-risk-of-relative poverty among people who work full-time.
Note: The at-risk-of-poverty rate is the share of people with an equivalised disposable income (after social transfer) below the at-risk-of-poverty threshold, which is set at 60% of the national median equivalised disposable income after social transfers. This indicator does not measure wealth or poverty, but low income in comparison to other residents in that country, which does not necessarily imply a low standard of living. Source: Eurostat, 2021 [ILC_IW16__custom_1 171 270].
As a result of their parents’ socio-economic challenges, many children of immigrants grow up in poor households. In 2020, children in immigrant households were about three times as likely to grow up in relative poverty as their peers in native-born households (26% versus 9%) in Norway (see Chapter 2 for a discussion). Among all children growing up in a poor households in Norway about 60% have immigrant parents. To address the needs of children in poverty, a National Strategy for Children growing up in low-income families (2020-23) was launched towards the end of 2020.
Immigrants and natives take up different benefits
Public support and second-chance offers for immigrants allow host countries to activate and use immigrants´ skills throughout their working lives. The Norwegian Labour and Welfare Administration (NAV) plays a key role and their database on benefit expenditure by place of birth provides several insights. Most importantly, just prior to the pandemic, age-standardised levels of public benefit expenditure (excluding pensions) were similar among the foreign- and native-born population, while being slightly higher among natives than immigrants in earlier years (see Chapter 2). However, the type of benefit expenditure differs strongly by place of birth: health-related benefits were higher for the native-born, whereas unemployment and social assistance benefits were higher among the foreign-born, with large differentiation among different origin groups (Figure 4.13).
Note: Health-related benefits includes sickness benefit, care benefit, training allowance, attendance allowance, work assessment allowance, disability benefit, and basic benefit. Family benefits include parental benefit, adoption benefit, lump sum grant, child benefit, cash-for-care benefit, single parent benefit. Unemployment benefits also include new benefits for 2020: Wage compensation benefit and unemployment benefit for self-employed and freelancers. Social assistance also includes qualification benefit. Note that social assistance depends on household income and is meant to secure income for the whole household. Social assistance is included here for the person to which it is paid out.
Source: OECD Secretariat calculations based on data from NAV, May 2021. For additional information on methodology see Lien (2015[21]), Benefit payments from NAV to immigrants, www.nav.no/no/nav-og-samfunn/kunnskap/analyser-fra-nav/arbeid-og-velferd/arbeid-og-velferd/stonadsutbetalinger-fra-nav-til-innvandrere.
Non-EEA immigrants have priority access to active labour market programmes
As mentioned in Chapter 2, NAV is in charge of labour market (re-)integration programmes and offers services for immigrants as part of their broader assistance to all registered job seekers. Everyone who formally applies to a NAV office and requires assistance has the right to a need-for-assistance assessment. However, since places for receiving assistance are funded by grants from the Storting, not everyone who applies may end up securing a spot. Overall, three groups of jobseekers are prioritised when allocating intervention places and therefore make up the bulk of participants in NAV initiatives:
Due to the priority access, non-EEA immigrants do not need to overcome common ex-ante barriers when it comes to participating in active labour market policies (ALMPs), (Bonoli and Liechti, 2018[22]). Nevertheless, the specific offers made to immigrants by each municipality are difficult to follow-up up on, as not all work-oriented measures are actually available in all municipalities (Djuve et al., 2017[23]).
Data from NAV suggests that one in four ALMP participants is foreign-born, which is less than their share among the unemployed (42%). However, when considering only full-time job seekers (i.e. excluding those with disability benefits, a benefit predominantly taken up by the native-born) about one in two is an immigrant. Among participants in ordinary labour market schemes immigrants accounted for about one in two (48%) in the last quarter of 2019 and for the same share in the last quarter of 2020 (Statistics Norway, 2021[24]).
As immigrants from the Eastern EU countries are not a priority group in access to NAV measures (see above) one could expect that they face access restrictions. Data suggests that they indeed have a lower participation rate. While immigrants from Eastern EU countries accounted for about 12% of the unemployed in the fourth quarter of 2020, only about 4% of participants in ordinary labour market measures in the last quarter of 2020 were from an Eastern EU country (Statistics Norway, 2021[24]).
Wage subsidies appear to be a successful measure for immigrants in Norway
Cross-country evidence on what active labour market policies work best for immigrants shows that wage subsidies have a positive impact on employment outcomes, whereas counselling, job search assistance, training, and subsidised public sector employment do not have a significant effect (Butschek and Walter, 2014[25]). In Norway, the effect of ALMPs on immigrants are rather well studied (for an overview see Calmfors and Sánchez Gassen (2019[26])). The findings for Norway confirm that wage subsidies, in other words subsidised private-sector employment, seems to be among the most effective labour-market programmes for promoting regular employment among immigrants, at least in the short run. Subsidised public-sector employment and on-the-job training do not appear to be effective.
In 2019, almost a third (31%) of wage subsidy beneficiaries were immigrants, three-quarters of whom from non-EU countries. The share of immigrants in wage subsidies increased relatively strongly in a short time, from previously 26% in 2017 and 29% in 2018. Among those leaving the support scheme with full ability to work, both the foreign- and native-born were equally successful. In both groups, about two in three former beneficiaries (67/68%) were in employment without other support subsidies six months after leaving the scheme. Among those who left with an impaired ability to work, both the foreign- and the native-born showed similarly low levels of employment (29/30%) without any other benefits six months later.
Increasing upskilling options throughout working life needs to remain a priority for all
NAV can provide different options for training and upskilling for those aged 18 and above in need of more qualifications to secure a job. This includes short work-oriented courses with theoretical and practical training. The content varies depending on the county’s labour market needs. Since 2016, there has been the possibility to enter vocational training and pursue further education at an upper secondary school (either individually or in groups); a measure previously reserved for people with disabilities. In addition, former Skills Norway, now part of the Directorate for Higher Education and Competence, promotes access and participation in formal, non-formal and informal adult education through research, basic skills, integration, career guidance and programmes and subsidies.
Data on the participation of immigrants in adult education and training shows that non-EU immigrants have higher adult education and training participation than the native-born, however at lower overall levels than Norway’s Scandinavian neighbours. However, there is a large underrepresentation of EU-migrants (Figure 4.14).
Source: OECD Secretariat calculations based on data from Eurostat, July 2021.
As of April 2020, against the backdrop of the COVID-19 pandemic and record-high unemployment in Norway, the simultaneous take-up of unemployment benefits and education was temporarily allowed. Before, it was possible to attend education while receiving unemployment benefits only in exceptional cases, as education in principle could not be financed with unemployment benefits. Recent analysis from NAV showed that about 75% of those benefiting from the temporary change in eligibility started higher education, but an increase in those who took vocational education was also recorded and the number of vocational training at upper secondary or vocational schools increased. Extended eligibility allowing the simultaneous take-up of both education and unemployment benefits has been assessed as a more effective tool than previous measures for getting more jobseekers to complete vocational education. As immigrants are overrepresented among the unemployed and about one-third of the adults in need of upper secondary education is an immigrant, anecdotal evidence suggests that the measure supported the upskilling of unemployed immigrants, but the exact outcomes should be assessed in more detail. From October 2021 onwards, eligibility requirements have been tightened again but remain more accessible than before the pandemic. While unemployment benefits should not function as an alternative to other student support measures, measures seem to have benefited those under the age of 25, which Norway particularly targets with its educational efforts. Here, the newly introduced restriction of allowing access going forward only to people at least 25 years of age seems counterproductive to this declared goal. A full 42% of unemployment beneficiaries in the scheme which took upper secondary education were under 25 years of age (Danielsen and Sørbø, 2021[27]). By tightening eligibility, these individuals lose this additional educational option, despite evidence that an investment in human capital formation can be expected to yield large returns for this lower-skilled and younger group (Benda, Koster and van der Veen, 2019[28]).
Two national second chance programmes support labour market (re-)integration
The Qualification Programme
Norway has an extensive “Qualification” Programme for persons with reduced capacity to work but who are ineligible for benefits related to unemployment, illness, or disability. As a relatively large-scale nationwide programme, it has supported the (re-)integration of adults (18-67 years of age) into the labour market since 2006. During the one-year full-time programme, with the possibility of a one-year extension, participants receive a qualification benefit, which is two times the National Insurance basic amount and on par with the introduction benefit. The programme includes work-oriented activities, education and training as well as close individual follow-ups and guidance. Changes to the Social Services Act in 2019 now allow for more flexibility in the qualification programme, such as targeted education offers, flexible intake and the opportunity to start the programme several times.
Those who start the programme are characterised by little work experience and low pensionable income. What is more, seven out of ten participants have received financial social assistance the year before starting, while about half have been long-term social assistance recipients. About 40% of participants have taken part in labour market measures the year prior to taking-up of the programme (Åsland Lima and Furuberg, 2018[29]).
Due to the set-up of the qualification programme and the overrepresentation of immigrants among recipients of social assistance, it is not surprising that in 2017, among the close to 4 000 participants almost 60% were immigrants (Åsland Lima and Furuberg, 2018[29]). The same research shows that all foreign-born and most strongly those with 3-5 years of residence in Norway achieve better outcomes in the programme than native-born. While the detailed admission category is not available in the data it is unlikely that these are former NIP participants (due to the access criteria of being long-term unemployed) and rather other groups of newcomers, such as family migrants who do not have access to extensive integration programmes upon arrival.
Notwithstanding the high share of migrants among the participants, a recent investigation by Norway’s Office of the Auditor General found that many immigrants who have the right to the programme are not offered the possibility to participate. The report also stressed large differences in this respect between municipalities as NAV offices and municipalities tend to assess similar cases differently with regulations offering considerable discretion. For instance, in a field experiment when three identical applications from foreign-born were send to 45 different municipalities, some NAV offices rejected all applicants, while other NAV offices granted access to the programme for all three cases. One reason for treating similar applications of immigrants differently is municipalities’ assessment of the role of low Norwegian language skills. While some case workers see weak Norwegian language skills as a factor that reduces a person’s capacity to work, making them eligible for the programme, other offices assess this as not a sufficient limitation. What is more, despite offered funds, not all municipalities do offer the programme, for reasons not entirely clear. For instance, in 2018, municipalities received funds to offer the programme for 9 000 persons but only provided places to about 5 200 persons – a mere 60% (Office of the Auditor General Norway, 2019[30]).
The Job Opportunity Programme
As seen above, a significant share of migrant women, especially mothers, remain outside of the labour market. For these women, Norway offers a special second chance programme called “Jobbsjansen” (Job Opportunity Programme). Until the 2020 Integration Act, the grant scheme consisted of three tracks, each dedicated to either (A) stay-at-home immigrant women, (B) immigrant youth who needed more primary or lower secondary education or (C) NIP participants who needed more time in the programme.
Under the new provisions, Jobbsjansen is a programme exclusively designed to integrate migrant women, while other subsidy schemes are available to municipalities for the other migrant groups. Since its fundamental reform in 2021, the programme targets unemployed migrant women aged 18 to 55 (the former track A) who, after some years in Norway, still have difficulties in entering the labour market and need basic skills while not being covered by other labour market schemes. About 60% of all participants have children. Former participants of the Introduction Programme (NIP) may be eligible for Jobbsjansen, but have to wait at least two years after completing the NIP (IMDi, 2021[31]).
The programme is somewhat similar to the Introduction Programme in terms of design – it must be adapted to individual needs and consists of various qualification measures, such as courses in Norwegian and social studies, work practice and other training elements, as well as health-promoting activities. It can last up to two years, with a possible extension of one year. Participants with little to no education are eligible for a four-year programme. What is more, all participants receive benefits, funded by grants from IMDi, while taking part in the programme (Riksrevisjonen, 2019[32]).
In 2020, 34 projects received funding to support 1 200 participants – both new participants and those from previous years. This is slightly more than earlier when around 1 000 participations were funded per year (Høgestøl and Skutlaberg, 2019[33]). The majority are enrolled in the programme for longer than a year. In 2020, around 350 women de-enrolled from the programme, 74% successful, as 58% ended up in employment and 14% in education. Around 13% dropped-out of the programme along the way mainly due to health problems, pregnancy or changing location. This is an improvement from 2017 when 17% dropped out. The rest of the participants that completed the programme were transferred to other labour market measures (8%) or were unemployed. Overall, the results from the programme have improved over the past decade. The share in employment or education have increased from 52% in 2012 to 74% in 2020 (Høgestøl, Lerfaldet and Kristoffersen, 2020[34]). Given the target group these are favourable outcomes. The programme is currently being upscaled and has received additional funding in 2021.
The overall favourable results are potentially linked to Jobbsjansen offering significant individual support to participants, particularly in the form of longer/more time slots with caseworkers. However, they may also stem from a positive selection bias, as participants have to apply for the programme and are thereafter selected on their suitability in terms of succeeding in the programme. There is also significant variation in outcomes across origin groups. For instance, among the women who participated in Jobbsjansen between 2013 and 2017, close to 70% of women coming from China and the Philippines got a job after completing the programme, compared to 30% of women from Syria and Afghanistan and only 14% of women from Somalia (Riksrevisjonen, 2019[32]). Another future challenge is the fact that most successful participants still have low earnings. Only around 40% of all participants can be considered self-sufficient after the end of the programme. However, this share is just 4% at the start (Riksrevisjonen, 2019[32]). In 2020, 49% of participants who de-enrolled, complete or stopped the programme, had a self-sufficient income. What is more, while before participation three in four women (75%) had their family and others as source of main income, after the programme this share was reduced to 27% (Høgestøl, Lerfaldet and Kristoffersen, 2020[34]).
Mentorship – a currently underdeveloped support measure
One promising measure to integrate immigrants into the labour market is mentorship. It helps in providing migrants with the necessary networks in the labour market, by matching immigrant jobseekers with native-born with a similar occupational profile. Mentorship is becoming increasingly widespread but small-scale, raising questions about efficiency.
In 2018, 12 mentorship programmes that specifically target immigrants were publicly financed, thereby doubling the offers available in 2014 (IMDI, 2020[35]). The initiatives tend to be small, generally involving less than 20 migrants. In 2014, 73 immigrants were offered mentoring programmes and the number had grown to 204 in 2018. Grants provided to programmes range from NOK 100 000 to 900 000, depending on the number of participants. While mentorship programmes have different target groups, the overwhelming majority of mentees are adults with high educational attainment. The majority (55%) had attained a master’s degree, 42% had a bachelor’s degree and the rest had only completed upper secondary education (Bjørnset and Kindt, 2019[36]). Programme objectives varied, making appraisal difficult. Some have quantitative goals such as increasing the number of participants in employment, while others have more qualitative goals, such as boosting self-confidence. The small scale of programmes further raises the question of efficacy.
In an assessment of all national mentorship programmes that received funding, regular training for the mentors as well as competence mapping and a well-researched matching were found to be important components for successful labour market integration. Clarification of expectations by both the mentee and mentors as well as structured joint activities (such as courses, trainee positions, CV writing and interview training) were also found to be important. While the majority of the mentors report satisfactory experiences, many identified language difficulties as the main obstacle for why their mentee experienced difficulties in finding a job. Language difficulties also worked as a barrier in their mentoring, as it was difficult to teach specific work-related jargon when basic language skills were missing (Bjørnset and Kindt, 2019[36]).
Discrimination is well documented in Norway
Discrimination is a key obstacle to immigrants’ social and economic integration alike. While its quantification and impact are difficult to assess, both have been relatively well studied in Norway.
One possible measure is self-reported discrimination. While this is not an objective measurement of discrimination, it is a good indication of social cohesion. There are two sources. The first is the Norwegian Quality of Life Survey, which covers a sample of the main immigrant groups in Norway. In the 2020 survey, 47% of natives with immigrant parents reported that they had experienced discrimination over the last 12 months. The share was 39% for the foreign-born (Støren, Rønning and Gram, 2020[37]).
The second source is the European Social Survey (ESS). It has much smaller samples and due to different definitions, it is not directly comparable to the Norwegian Quality of Life Survey. On the other hand, it includes the entire immigrant population and allows for international comparison. According to the latest figures, in Norway, 22% of native-born youth with immigrant parents state that they belong to a group that is discriminated against in Norway. Shares among foreign-born youth are much lower at only 13% (Figure 4.15). The figure for the native-born with immigrant parents is one of the highest in the OECD.
Both the Norwegian Quality of Life Survey and the ESS show for Norway, as for most other European countries, higher self-reported discrimination among native-born offspring of immigrants. This indicates that immigrant offspring born in Norway have a higher awareness of discriminatory behaviour in Norway than those who have been born abroad.
Note: Share responding that they belong to a group that is discriminated against based on ethnicity, nationality or race.
Source: OECD Secretariat calculations based on data from European Social Survey, 2021.
While self-report studies show perceived discrimination, they do not capture actual occurrences of discrimination. Several randomised field-experiments comparing the job-search success of fictional candidates, who differ only regarding their name, show that individuals with “foreign sounding” names face discrimination in the hiring process. For example, when two identical job applicants were considered, those with a “Pakistani sounding” name were 25% less likely to receive an invitation to a job interview compared to applicants with a “Norwegian sounding” name. Discrimination was higher in the private sector than in the public sector and more pronounced against men than women (Birkelund et al., 2014[38]).
Discrimination has also been documented in the housing market. One experiment examining the Norwegian housing market found that men with Arabic sounding names were least likely to receive a positive response to their apartment request (Andersson, Jakobsson and Kotsadam, 2012[39]). Other studies found that immigrants in Norway often pay higher rents than the native-born and are more likely to be arbitrarily evicted (Forbrukarrådet, 2021[40]).
Further evidence of actual discrimination are the complaints send to Norway’s Equality and Anti-Discrimination Ombud. The Ombud offers guidance, free of charge, to individuals, union representatives, employers and organisations, government officials and trade union representatives who have questions related to equality and discrimination. Each year it handles around 2 000 guidance cases. Around half of handled cases are questions related to the workplace and the labour market. When it comes to grounds of discrimination, gender, disability, and ethnicity (which includes language and religion) each typically make up around 15-20% of the yearly total number of cases.
In addition, the Ombud can provide guidance on how to bring a case to the Equality and Anti-Discrimination Tribunal (see below). The tribunal, which has been operating since 2018, decided about 400 cases in 2020 and 530 in 2021. Overall, about 40% of the cases were connected to the workplace, where discrimination or similar practices are most identified. In both years, 27% of the cases dealt with issues of discrimination/harassment based on ethnicity or religion, followed by disability (23% of the cases in both years) (The Anti-Discrimination Tribunal, 2022[41]).
Overall, public awareness of discrimination is increasing in Norway. In the 2020 edition of the Integration Barometer, 84% of the Norwegian population believed that immigrants are discriminated against – a record high. Moreover, the share of respondents who believed that discrimination occurs to “a large degree” more than tripled between 2013 and 2020 (from 9% to 32%). Most respondents believed that discrimination of immigrants occurs especially in the labour market (90%) (Brekke, Fladmoe and Wollebaek, 2020[42]).
Policies targeting employers combat discrimination and encourage diversity
Norway has a relatively strong and longstanding framework to address the issue of discrimination, with various Action Plan against immigrant discrimination already in place since 1992.
Norway, like most OECD countries, has recently taken new measures to combat discrimination and encourage diversity. In 2018, the Equality and Anti-Discrimination Act came into force, merging four anti-discrimination laws therefore covering equality and anti-discrimination related to gender, ethnicity, religion, belief, disability, sexual orientation, gender identity and expression, age, pregnancy as well as maternity and paternity leave. Under the new Act, the government established an Equality and Anti-Discrimination Tribunal, a complaints body that makes final, legally binding decisions on harassment and discrimination cases, including possible compensation.
In Norway, all employers – regardless of size and sector – are obliged to document their equality and anti-discrimination work. Since 2020, public and private enterprises with more than 50 employees must make active, targeted, and systematic efforts to combat discrimination. This includes systematic investigations and an annual positive obligation to report their equality work. Companies may also receive support from Norway’s Equality and Anti-Discrimination Ombud who is working to establish agreements with large national firms to provide guidance on this obligation. In 2020, this included joint work with Norway´s largest banks and one of the largest grocery chains. The agreement covers guidance on equality work for all grounds of discrimination, including ethnicity. The guidance takes the form of workshops on company duties, with lectures as well as awareness training.
Two new Action Plans strengthen measures against racism and discrimination. The Action Plan to combat Discrimination and Hatred towards Muslims (2020-23) aims to prevent and deter racism and discrimination against Muslims and persons believed to be Muslims. The action plan contains 18 measures. The Action Plan against Racism and Discrimination on the Grounds of Ethnicity and Religion for 2020-23 contains 50 measures in many different areas, including work life, housing and health, research and knowledge, education, public debate, and public service. Among them is a pilot scheme with anonymous job applications within the civil service to respond to discrimination in recruitment, as well as initiatives to strengthen research on discrimination in the workforce and the establishment of a State Secretary Committee to ensure that all efforts are well co-ordinated. An additional Action Plan against racism and discrimination will focus on labour market integration and on youth and will be launched towards the end of 2023.
Combating indirect discrimination through language requirements is a challenge
Selective hiring practices are difficult to demonstrate as characteristics which have not been explicitly taken into account, or are not observed, could account for an employer’s preference for certain candidates rather than outright discrimination.
Evidence from Norway suggests that experience matters and shapes employer’s future hiring decisions of the same ethnic group. Three randomised field experiments on ethnic discrimination in the Norwegian labour market found that employers with negative experiences with immigrant workers were unwilling to give job applicants from the same immigrant group an opportunity, whereas employers with positive experiences were more willing to hire these workers. Employers without experiences with immigrant workers were rather risk-averse and used general stereotypes (Birkelund et al., 2020[43]). The resulting interpretation of origin country of immigrants as an indicator of their skill and fit to perform particular jobs has been documented before in Norway (Friberg and Midtbøen, 2017[44]).
The requirement of proficiency in Norwegian is a way to hide outright discrimination in the labour market. While discrimination on language grounds is prohibited in Norway since 2006, the practical implication is limited. A recent report on the issue of “what employers talk about when they talk about language” highlights that the result of Norwegian language tests fails to function as intended, as employers make little use of this information in the recruitment process and consider subjective assessments to be more reliable than objective and neutral criteria. For instance, significantly more employers trust that a candidate who writes that they have a good written and spoken command of Norwegian will be able to meet their language requirements on the job, compared to individuals who indicate that they passed the official B2 level language test. It thus seems that for employers, the job seeker’s self-reported skills may have higher informational value than a standardised language assessment. This runs counter to the objective of the Norwegian language test to make the recruitment process more objective and neutral. Hence, the standardised language assessment does not appear to function as intended (Mathilde Bjørnset, Marianne Takvam Kindt and Jon Rogstad, 2021[45]).
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