Research group proposes changes to unemployment security and labour market policy

A group of researchers led by Professor Markus Jäntti proposes that the Government implement measures that studies have shown to promote employment. The Government will examine these proposals when it prepares employment measures to strengthen the economy.

“There are no easy ways to increase employment. Based on research results, we have made a number of proposals, which we believe will promote employment. In our report, we have taken into account the impact of measures not only on employment but also on income distribution and wellbeing in Finland,” says Markus Jäntti, Professor of Economics from Stockholm University.

“I would like to thank the group for their thorough work. We will take a careful look at the proposals. In addition to the employment measures already taken, the Government is committed to making decisions by the end of its term to strengthen public finances by EUR 110 million,” says Minister of Employment Tuula Haatainen.

The Ministry of Economic Affairs and Employment published the report on 8 June 2021. The independent working group started its work in November 2019.

Focus on support for job search and people with partial work capacity

The research group’s proposals and recommendations are divided into six categories:

1. unemployment security
2. active labour market policy
3. people with partial work capacity
4. taxes and income transfers
5. employment impact of entrepreneurship
6. immigration and employment

According to the researchers, the duration of unemployment security should be tied to economic cycles. In an exceptionally difficult economic situation, the duration of the daily allowance period would be longer than now and at other times shorter than now. The group also proposes that the length of employment required of jobseekers to be eligible for unemployment benefit be based on the jobseeker’s income. Moreover, the payment of daily allowance should become automated. If jobseekers neglected their obligation to apply for a job, they would receive a warning before losing their benefits for a certain period.

To help jobseekers find work quicker, the report proposes increases to the personnel of TE Offices, earlier meetings with jobseekers and wider use of information technology.

In order to promote employment of people with partial work capacity, the researchers would increase intensive support measures such as work training and coaching.

The report includes a review of employment rates in the Nordic countries as well as a more detailed examination of Finland’s workforce and people who could potentially become employed.

Inquiries:

Markus Jäntti, Professor, Stockholm University, tel. +46 8 162645
Kimmo Ruth, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 29 504 8073 
Timo Nevaranta, Special Adviser to the Minister of Employment, tel. +358 50 340 9483 (questions to the Minister of Employment)