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Older workers and immigration keep employment rate up

Without immigration, the workforce will decrease and the availability of skilled labour will become more difficult, according to Finland's Ministry of Economic Affairs and Employment.

Window washers at work in Helsinki in April 2023.
Window washers at work in Helsinki in April 2023. Image: Henrietta Hassinen / Yle
Yle News

A fresh short-term labour market forecast by the Ministry of Economic Affairs and Employment indicates that the employment trend in Finland will temporarily decline at the end of the year, but show positive growth again in 2024.

"Employment that stays at a good level helps avert an economic downturn. Growing employment among people with foreign background and the oldest members of the workforce is a long-awaited improvement in the Finnish labour market," said the Ministry's Under-Secretary of State, Elina Pylkkänen, in a release on Thursday.

According to the forecast, employment will increase by about 5,000 people in 2023, mainly driven by the growth in the employment of older people. There will be a temporary decline in employment in late 2023 and early 2024. Employment will increase by only about 1,000 people in 2024, but return to stronger growth of around 18,000 people in 2025.

Based on the forecast, the proportion of part-time work will not increase in the next few years unlike it did after the coronavirus crisis. This will slow down employment growth in the future.

The Ministry states that strong net immigration has increased the supply of labour in recent years.

Only about 3,000 the Ukrainians who have received temporary protection have applied for a municipality of residence, which means that they are not included in the labour force. The number of Ukrainian refugees of working age is estimated to be about 30,000 in Finland.

The short-term labour market forecast of the Ministry of Economic Affairs and Employment is based on the economic cycle forecast of the Ministry of Finance. That, in turn, projects a fall in GDP 0.2 percent this year, but growth of 1.3 percent next year and 1.6 percent in 2025.

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