Politics & Policies

Aging Finland – 34,000 immigrants needed instead of the current 18,000 in order to stop the decrease working-age population

Finland does not apply quotas or a points-based system to labour migration. Instead, Capture d’écran 2016-04-13 à 08.12.58Finland applies the determination of the availability of labour when issuing a residence permit for an employed person. However, the proportion of labour subject to the determination of the availability of labour is relatively low and the majority of labour uses other channels than applying for a residence permit for an employed person.

The determination of the availability of labour takes into account the regional work permit policies prepared by the Centres for Economic Development, Transport and the Environment on the basis of multifaceted materials. Labour market organisations and several other cooperation partners participate in this preparation. Cooperation with labour market organisations is based on legislation. The work permit policies include a list of professional fields in which labour availability has declined. To these fields, labour can generally be hired from outside the EU/EEA.

In Finland, there is no uniform definition for labour shortage. With the aid of the employer interviews conducted by Statistics Finland, the Ministry of Employment and the Economy (MEE) looks into how many enterprise and establishment sites seeking labour 1) have experienced recruitment problems, and 2) how many of these sites have remained entirely or partially without labour. The latter group is considered to suffer from a labour shortage.
In addition to the employer interviews, the occupational barometer system plays a key role in the determination of shortage occupations. Three times a year, the Ministry of Employment and the Economy collects into the occupational barometer system the Employment and Economic Development Offices’ estimates of whether there are recruitment problems expected for approximately 200 key occupations within the next six months. On the basis of their expertise, the Employment and Economic Development Offices estimate whether the occupations will have: 1) great shortage of job seekers; 2) shortage of job seekers; 3) balance; 4) surplus of job seekers; 5) great surplus of job seekers. Labour market participants can also use the foreammatti.fi information service that is maintained by a private service provider and offers region and occupation specific labour market information.

The Finnish economy and labour market have suffered from recession for the past few years. According to the latest occupational barometer, published in February 2015, the situation as a whole has lately developed so that shortage of labour has decreased and surplus of labour has increased. At the national level, there are only 13 shortage occupations whereas there is surplus in nearly 40 per cent of the occupations. Labour shortage concentrates in the social and health care sector and sales work.

For Finland, the challenge seems to be the problem of balancing the supply and the demand in the labour market: even within the same field, there can be simultaneously both unemployed job seekers and job vacancies that employers find hard to fill. There is a professional or geographical mismatch between job seekers and job vacancies. In Finland, the regional mobility of labour is in particular affected by the situation in the housing market.

Despite the weak economic cycle, the development of labour migration is considered important due to the ageing population and the weakening dependency ratio. According to the Future of Migration 2020 Strategy, Finland needs to attract work-related migration of a kind that is active, systematic and targeted. Discontinuing the determination of the availability of labour and increasing labour migration became a topic in public debate just before the parliamentary election organised in April 2015.

In Finland, the availability of labour is forecast in labour administration over the short term, whereas educational administration forecasts analyse long-term labour demand. VATT Institute for Economic Research produces labour demand calculations for anticipation purposes. Studies, analyses and reports on labour supply and demand have also been prepared by several other parties, such as the Helsinki Region Chamber of Commerce, Finnish Business and Policy Forum EVA, Local Government Employers (KT) and the Labour Institute for Economic Research. It is specifically the need for labour migration that the analysis published by EVA in January 2015 seeks to determine. According to the analysis, the annual net migration should be 34,000 persons instead of the current 18,000 in order to stop the decrease in the number of working- age people.

The National Audit Office of Finland (NAO) has highlighted shortcomings in statistics particularly concerning temporary foreign labour, moving mainly within the EU. However, the development of statistics has not proceeded due to financial reasons. It is still evident that the number of people coming to Finland for employment from the EU is substantially higher than the number of those coming from outside the EU and the EEA. It is estimated that the number of people coming from the EU was approximately 50,000 in 2013. Especially when it comes to Estonians, this number usually includes several employment periods during the year. In the same year, labour migration from outside the EU and the EEA was rather minor: there were approximately 9,100 positive residence permit decisions, and in addition, approximately 16,000 workers came to work in Finland with a visa or on a visa-exempt basis, mainly for seasonal work.

In Finland, the effects of immigration policy on labour shortage and the national labour market are not systemically monitored. However, when the regional work permit policies are prepared, the effectiveness of the previous policy is taken into account. At the moment, each party assesses the effects of labour migration in their own silo, according to their own interests. There are different views with regard to whether there is labour shortage or not and what are the effects of labour migration.

Chosen excerpts by Job Market Monitor. Read the whole story at  Determining labour shortages and the need for labour migration from third countries in the EU: national report of Finland

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