28.5.2008

Disability policies in Finland differ from another Nordic Countries

There are negative incentives of recruiting persons with long-term illness or reduced working capacity in Finland.

The study compares disability policies in Finland and in the other Nordic Countries. The description covers both income transfer benefits and active labour market policy (ALMP) measures targeted to the disabled.

Similarities and differences between the countries are analysed by describing the main institutional differences in the benefit and ALMP systems as well as by comparing the usage rates of these systems in relation to the working-age population.

The results suggest that lack of targeted policy measures and partial social security benefits may be one of the main reasons contributing to the bias in Finnish work absence towards long-term unemployment, as opposed to the Scandinavian countries, which emphasize integration policies and usage of health-related measures.

Another major institutional difference reinforcing the distinction between Finland and the other Nordic countries is the negative incentive structure in Finland caused by high employer-specific costs in case of recruiting persons with long-term illness or reduced working capacity.

Publication: Hytti H.  Disability policies and employment – Finland compared with the other Nordic Countries . Helsinki: Kela, Social Security and Health Research: Working Papers 62, 2008. ISBN 978-951-669-772-0 (pdf).

For additional information, contact: Helka Hytti, Senior Researcher, The Social Insurance Institution, Research Department, tel. +358 20 634 1370, firstname.surname@kela.fi

Publication orders: publ@kela.fi or tel. +358 20 634 1947