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The best country in the world to live in … or not?

Norwegian welfare system facing major challenges

For the past several years Norway has topped the UN Human Development Index – but that does not mean it is the world’s best country to live in. The Norwegian health and welfare system is faced with a host of challenges.

norwegian flag in pieces “There is no doubt that Norway scores high on many human development indicators. The country has a high rate of employment and generous welfare schemes, and is spending more money on welfare-related measures than ever before. The welfare state is not being dismantled but rather restructured,” says Senior Researcher Aksel Hatland at NOVA - Norwegian Social Research.

Dr Hatland has edited the book Veivalg i velferdspolitikken (“Ways forward in welfare policy”), which describes trends and obstacles in the Norwegian welfare state. The publication was funded under the now-concluded Programme on Welfare Research at the Research Council of Norway.

Disability benefits are more attractive

Overall use of social insurance benefits has remained stable for many years in Norway. However, there is a disproportionate distribution of disability benefits and sickness benefits on the one hand, versus unemployment benefits on the other.

cover of book “In 2007 expenditures for disability and sickness benefits in Norway were 24 times higher than expenditures for unemployment benefits,” states Dr Hatland.

“No other country has a higher proportion of recipients of health-related benefits than Norway and the imbalance in relation to unemployment benefits appears to be growing,” he explains.

“For people without a job, the Norwegian welfare system makes it more attractive to apply for sickness or disability benefits than unemployment benefits. This is because individuals receiving health-related benefits have more rights and fewer obligations. Statistics show that practically no one returns to working life once they have been granted disability benefits.”

In Dr Hatland’s view, people are not being categorised correctly and many individuals whose main problem is that they are out of work are being granted other types of benefits. “A significant portion of Norway’s health services are actually being used to take care of people whose primary problem is that they are unemployed.”

Challenging for the individual

Dr Aksel Hatland Dr Aksel Hatland The trend in Norway today is towards providing more services and fewer cash benefits to target groups such as children, the elderly and individuals with health problems. Dr Hatland envisions an increasing degree of differentiation and diversification in this area, and anticipates the introduction of a number of international schemes that will also affect Norwegian citizens.

“This could lead to an even stronger divide between those who have the wherewithal to understand the complexity of the welfare schemes and those who don’t,” he says.

“The growing segment of the population that is well-educated will manage just fine, but those who don’t have the capacity to take advantage of the various choices and flexibility offered will lose out. This is an area that will become increasingly challenging to deal with,” concludes Dr Hatland.

Key area of Norwegian research

A new division for society and health-related research was established in connection with the reorganisation of the Research Council in 2010. One of the division’s main tasks is to fund research that will form a basis for policy designation, administration and development of public services in the health and welfare sector. The Research Programme on Welfare, Working Life and Migration (VAM) is a key activity under the division.

Written by:
Siv Haugan/Else Lie. Translation: Victoria Coleman/Carol B. Eckmann.
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