07 May 2019 – Finland must make every effort to streamline the benefit system and encourage young jobseekers to look for work in order to reduce the share of under-30 year-olds who are not in employment, education or training (NEETs), according to a new OECD report.
Investing in Youth: Finland says that youth employment rates (55%) are above the OECD average (53%), but lower than other Nordic countries. But the unemployment rate among 15-29-year olds reached 15% in 2017, seventh highest in the OECD area.
With a strong demand for high-skilled workers and persistent shortages in high-skilled jobs, low-skilled youth struggle in the Finnish labour market. Young people who failed to complete upper secondary education account for nearly half of all NEETs.
Despite the outstanding performance of the Finnish education system, there is room to raise completion rates in upper secondary education. In particular, one in four vocational students do not obtain their upper secondary degree within two years after expected graduation.
Finland has one of the most selective higher education systems in the OECD, with 67% of applicants rejected each year, compared with an OECD average of 30%. This delays the start of studies for many and forces applicants to take unwanted gap years. Only 25% of upper secondary graduates manage to start their tertiary studies immediately after graduation.
Finland also has one of the most generous benefit systems for young people among OECD countries: one in three young Finns receive an out-of-work benefit, the second highest share in the OECD. The wide range of benefits and services help young people face economic and labour market challenges, but they also create considerable disincentives to seek work and leave benefit.
Among the report’s recommendations to help young people in Finland into work are to:
- Address the fragmentation of the social protection system by streamlining the benefit system, removing disincentives to work, and revisiting the child home care allowance.
- Strengthen the activation of benefit recipients and the effectiveness of active labour market programmes.
- Strengthen the provision of integrated services by increasing the resources and impact of the Ohjaamo centres, evaluating available programmes and new initiatives, developing a multi-sectoral joint service and providing mental health training to caseworkers.
- Revise the administrative and regional government reform to tackle the fragmentation and activation challenges, and consider a gradual transition based on other countries’ experiences with the outsourcing of public health, social and employment services.
- Prevent school dropout by ensuring sufficient support for students with additional needs, introducing cross-age peer counselling and raising the compulsory schooling age.
- Reach out to early school leavers by ensuring that youth in all regions are adequately served by youth support networks and developing digital services to reach young people in distant areas.
- Ease the transition from upper secondary to tertiary education by reforming the highly selective tertiary education admission system, expanding the capacity of the higher education system, and adjusting the study financial aid system if needed.
- Improve the pathway from vocational education to employment by promoting collaboration with employers and developing short-cycle postsecondary vocational programmes for upper secondary graduates.
Investing in Youth: Finland is available at http://oe.cd/youth-finland.
Youth employment is one of the key issues of the OECD’s broader “I am the Future of Work” campaign, which aims to contribute to a positive future of work transition, helping to transform learning and social protection systems as well as reducing inequalities between people and across regions. See http://futureofwork.oecd.org.