Description

The large influx of migrants to Nordic countries in recent years is challenging the
 adoptability of Nordic labor market institutions while also adding to potential growth. This
 paper examines the trends, economic drivers, and labor market implications of migration to
 Nordic countries with a particular focus on economic migration as distinct from the recent
 large flows of asylum seekers. Our analysis finds that migration inflows to the Nordics are
 influenced by both cyclical and structural factors. Although migration helpfully dampens
 overheating pressures during periods of strong demand, and over the longer term will cushion
 the decline in labor supply from population aging, in the near-term unemployment can rise,
 especially among the young and lower-skilled. The analysis highlights the need to adapt
 Nordic labor market institutions in a manner that better facilitates the integration of migrants
 into employment. In particular, greater wage flexibility at the firm level and continued strong
 active labor market measures will help improve labor market outcomes among immigrants.

More publications in this series: Working Papers

More publications by: Giang Ho ; Kazuko Shirono