Challenges to the Nordic Welfare State - Comparable Indicators Second edition Tor Morten Normann, Elisabeth Rønning and Elisabeth Nørgaard Challenges to the Nordic Welfare State - Comparable Indicators Challenges to the Nordic Welfare State - Comparable Indicators Second edition © Nordic Social-Statistical Committee 2014 Published by the Nordic Social-Statistical Committee (NOSOSCO) Artillerivej 5 DK 2300 Copenhagen S Tlf. +45 32685148 Email: [email protected] Website: www.nom-nos.dk Editor: Jesper Munk Marcussen Cover: Sisterbrandt designstue, Copenhagen Layout, design etc.: Lene Kokholm ISBN 978–87-90248-61-1 Contents Contents Preface ....................................................................... 9 Summary .................................................................... 12 Chapter 1 Challenges and Scope .... ................................................ 19 1.1 Establishment of the Welfare State ................................................... 19 1.2 The Nordic Welfare Model ............................................................... 20 1.3 Challenges for the Welfare States ...................................................... 22 1.4 A Costly Welfare State? ................................................................... 23 1.4.1 The Composition of the Social Expenditure .................................... 26 1.4.2 Changes in the Expenditure from 2006 to 2009 ............................... 28 1.5 Challenges and Expenditure - a Summary ............................................. 35 Chapter 2 Demography – An Ageing Population .................................... 38 82.1 Fewer People to Support Pension Recipients ......................................... 38 2.2 Not Enough Children Are Born ........................................................... 40 2.3 We Keep Getting Older ................................................................... 42 2.4 Immigration and Emigration ............................................................. 45 2.5 Education ................................................................................... 47 2.5.1 Higher education in the Nordic countries ...................................... 47 2.6 Summary .................................................................................... 50 5 Contents Chapter 3 Income Inequalities and Social Exclusion .............................. 52 3.1 Income Distribution and Income Inequality ........................................... 54 3.1.1 Low Income .......................................................................... 54 3.1.2 Low Income, by Gender ........................................................... 57 3.1.3 Low Income and Social Transfers ................................................ 58 3.1.4 Income Distribution – S80/20 ..................................................... 61 3.1.5 Low Income among Employed Persons .......................................... 62 3.2 Risk of Poverty or Social Exclusion ..................................................... 65 3.3 Economic Problems and Material Deprivations ....................................... 67 3.4 Relatively Few People in the Nordic Region with Low Income and Financial Problems .................................................................................... 71 Chapter 4 Labour Market and Labour Market Activity ........................... 74 4.1 Employment ................................................................................ 75 4.1.1 Employment level in the Nordic countries and Europe ....................... 75 4.1.2 Employment among men and women ........................................... 78 4.1.3 Youth Employment ................................................................. 81 4.2 Unemployment ............................................................................. 82 4.2.1 Unemployment in the Nordic Region and Europe ............................. 83 4.2.2 Unemployment among men and women ........................................ 84 4.2.3 Youth Unemployment .............................................................. 86 4.3 Exclusion, Marginalisation and Disability .............................................. 88 4.3.1 Marginalisation ...................................................................... 89 4.3.2 Exclusion ............................................................................ 90 4.3.3 Disability ............................................................................. 91 4.3.4 Marginalisation, Exclusion and Disability in the Nordic Countries .......... 92 4.3.5 Which Factors Affect Marginalisation? ......................................... 96 4.3.6 Which Factors Affect Exclusion? ............................................... 115 4.3.7 Which Factors Affect Disability? ............................................... 129 6 Contents 4.3.8 Marginalisation, Exclusion and Disability in Europe ......................... 143 4.3.9 Employment, Unemployment, Marginalisation, Exclusion and Disability ............................................ 147 4.4 Part-time Employment ................................................................. 150 4.4.1 Part-Time Work as a Phenomenon - and as a Challenge for the Welfare State ....................................................................................... 151 4.4.2 Employment and Part-Time Work in the Nordic Region and Europe ..... 152 4.4.3 Women Working Part Time ..................................................... 156 4.4.4 Duration of Part-Time Work .................................................... 160 4.4.5 The Stable Part-Time Labour Force – and the Newcomers ................ 162 4.4.6 The New Part-Time Workers – What Did They Do the Previous Year? .... 171 4.4.7 Causes of Part-Time Work ...................................................... 172 4.4.8 Part-time Work- Summary ...................................................... 176 4.5 Employment Amongst Seniors ......................................................... 177 4.5.1 Senior Employment .............................................................. 177 4.5.2 The Main Activity of seniors .................................................... 181 4.5.3 Trends in Senior Employment .................................................. 185 4.5.4 Seniors In and Outside of the Labour Force .................................. 188 4.5.5 Senior Employment in Europe .................................................. 200 4.5.6 Senior Employment- Summary ................................................. 201 Chapter 5 Health .................................................................. 203 5.1 Healthy Years of Life .................................................................... 203 5.2 Self-assessed health, chronic illness and reduced functional ability in Europe ................................................................................. 206 5.2.1 Many People in the Nordic Region Are in Good Health ..................... 206 5.2.2 Self-assessed Health, Chronic Illness and Reduced Functional Ability in Europe ..................................................................................... 209 5.3 Larger or Smaller Gender Differences? ............................................. 212 5.4 Age Differences – Healthier Seniors? ................................................. 215 5.5 Gender and Age Differences ........................................................... 219 7 Contents 5.6 Does Country of Birth Impact Health? ............................................... 223 5.7 Educational Differences – Still There? ............................................... 226 5.8 Employment and Health are Connected ............................................. 232 5.8.1 Employment – Narrower Gender Gap.......................................... 234 5.8.2 Share of Part-Time Work Does Not Vary as Much According to Health Condition as Full-Time Work ........................................................... 236 5.8.3 Men Work More Full-Time – Irrespective of Health ......................... 238 5.9 Health, Education and Employment .................................................. 241 5.9.1 Largest Reduction in Labour Force Participation for those with Impaired Health and Low Education ............................................................. 241 5.9.2 What About the Rest of Europe? Education, Impaired Health and Changes in Labour Market Activity .............................................................. 246 5.10 Summary ................................................................................. 251 References ................................................................ 254 Appendix Tables ......................................................... 257 Publications published by NOSOSCO after 2000 ..................... 304 8 Preface Preface This report was written on behalf of the Nordic Social statistical Committee (NOSOSCO). Its background is the recognition of the fact that the welfare states will face important challenges i future years, which has further become highlighted by the international financial crisis that arose in the autumn of 2008. The report deals mainly with the Nordic welfare states, but we will also make comparisons with other European countries. This is based on the assumption that there are key common traits that makes it possible to talk about a Nordic welfare model. The purpose of the report is to emphasize some of the key challenges which the welfare states are faced with in order to present comparative indicators that enable us to further monitor and analyse